Deardorff in LA Times: Trump's intent to renegotiate NAFTA could harm U.S. trade with Mexico

January 25, 2017

In "Trump moves quickly in bid to revamp America's trade policy," the LA Times quotes Alan Deardorff, whose work is focused on international trade and the effects of trade deals. The article, published on January 23, examines the implications of President Donald Trump's executive action pulling the United States out of the Trans-Pacific Partnership (TPP) and his promise to renegotiate the North American Free Trade Agreement (NAFTA).

[President Trump's] "intent to renegotiate NAFTA could be very harmful if it restores the tariffs and other barriers to trade between the U.S. and Mexico that existed prior to NAFTA," Deardorff told the Times. "That would destroy, but not replace, the complicated North American supply chains that have grown under NAFTA and [that] sustain much of U.S. manufacturing."

As the article notes, Canada and Mexico are the United States’ most significant source of trade, with American exports to Mexico totalling $212 billion last year, up from $4.5 billion in 1993 when NAFTA was signed. Imports of goods from Mexico to the U.S. totaled about $271 billion from January to November of 2016, up from nearly $40 billion in 1993.

It is unclear what changes President Trump expects to make in trade deals with either Mexico or Canada, but negotiations would likely take months and be led by Trump’s nominees for U.S. trade representative (Lighthizer) and commerce secretary (Ross).

Alan V. Deardorff is the John W. Sweetland Professor of International Economics in the Department of Economics and a professor of public policy at the Ford School; his research focuses on international trade and tariffs.