SENATE FINANCE COMMITTEE
Hearing on U.S.-Mexico-Canada Agreement
For questions on the note below, please contact the Delta Strategy Group team.
On February 12, the Senate Committee on Finance held a hearing, “The U.S.-Mexico-Canada Agreement: Evaluating North American Competitiveness.” Witnesses in the hearing were:
- Kevin Brady, Former House Ways and Means Committee Chairman; Senior Consultant, Akin
- Eric Gottwald, Policy Specialist for Trade and International Economics, AFL-CIO
- Paul McCarthy, President & CEO, MEMA. The Vehicle Suppliers Association
- Ted Vander Schaaf, Owner, Vander Schaaf Farms
Below is a summary of the hearing prepared by Delta Strategy Group. It includes several high-level takeaways, followed by summaries of opening statements and discussion.
Key Takeaways
- Senator Crapo (R-ID) highlighted how it is vital to maintain the U.S.-Mexico-Canada Agreement (USMCA) as a strongly bipartisan replacement for the North American Free Trade Agreement (NAFTA), calling for the timely conclusion of the review and extension of USMCA to preserve certainty and reinforce U.S. competitiveness. Among the benefits outlined, he cited how, under USMCA, the U.S. exported nearly one-third of its agricultural goods to Canada and Mexico.
- There was broad agreement regarding the range of U.S. interests provided and supported by USMCA, with an emphasis on certainty, alongside investments made aimed at on-shoring and near-shoring supply chains. Discussions raised how it is in the U.S.’s interest to be a reliable trading partner, especially in regard to already beneficial trading relationships and in the context of ongoing competition with China.
- Brady framed USMCA as the gold standard for U.S. trade agreements, providing certainty on investments and reshaping trade to compete with China. He outlined how by incentivizing production and sourcing investment in North America, USMCA is reducing reliance on China and other state-driven supply chains while limiting exposure to hostile or unreliable actors. He emphasized strengthening and extending USMCA as essential, citing how certainty was the most frequent point raised in USMCA review comments submitted to USTR.
- Brady raised how the six-year review for USMCA was not designed for termination but for reinforced oversight and increased input from Congress, describing the review as an opportunity and critical tool to reset certainty. He warned that ten years of annual reviews without an extension would reduce the economic value of USMCA and weaken long-term investment.
- Comments emphasized the importance of strong enforcement, stating that companies should not be disadvantaged by entities that disregard the rules and undermine a level playing field. Brady referenced transshipments from China and foreign direct investment (FDI) into Mexico as key risks, stating that economic security discussions may be the most significant improvements made during USMCA’s review.
- Vander Schaaf raised enforcement gaps, such as Canada’s failure to meet certain tariff-rate quotas (TRQs) commitments and dumping of agricultural products that depress U.S. markets. He called for modifications to the USMCA language or renewed discussions to preserve a level playing field for U.S. exporters and strengthen enforcement measures.
- Recommendations raised to be addressed in review discussions, including tightened rules of origin and a screening mechanism for foreign investments. Brady and McCarthy agreed on how stringent rules-of-origin requirements create compliance challenges, reiterating the need for modernization and standardization to preserve integration and competitiveness under USMCA.
- Senator Marshall (R-KS), in referencing how to address the $263 billion trade deficit with Mexico, stated that there is a large opportunity within ethanol exports to Mexico. He also warned that the current rail system is maxed out, calling it a major challenge that needs to be addressed.
- In response to concerns about whether President Trump’s tariffs and rhetoric on USMCA are a threat to trade relations, Brady emphasized that the President’s negotiating style is aggressive but should not interfere with strengthening, preserving, and extending USMCA. He stated that the President understands how USMCA and the North American partnership help the U.S. grow and compete with China. He underscored that USMCA has positioned the U.S., Canada, and Mexico to weather global recessions, attract investment, reshore manufacturing, and strengthen supply chains.
SUMMARY
Opening Statements and Testimony
Chairman Mike Crapo (R-ID)
Almost exactly six years ago, Congress and the President approved the USMCA in the most bipartisan vote ever taken in the Senate on a free trade agreement. Now, we are on the road to USMCA’s first joint review, where we can assess whether USMCA commitments deliver as intended. The answer is largely yes. USMCA protects U.S. jobs, strengthens domestic manufacturing, and continues to grow the U.S. economy. Since the enactment of USMCA, $775 billion were invested in the U.S. from Canada and Mexico, a 55 percent increase from pre-USMCA. USMCA propelled the U.S. to export $60 billion in agricultural goods to Canada and Mexico. Is USMCA a perfect agreement? No, but no agreement ever is. I have long called for more robust enforcement of USMCA commitments. Congress approved USMCA with large bipartisan majorities largely because of its strong rules and its mechanisms necessary to enforce those rules. It is critical for the U.S. to ensure that all its stakeholders, including U.S. farmers, businesses and workers, fully benefit from USMCA. I appreciate and commend the President and Ambassador Greer’s unwavering commitment to enforce USMCA. As the USMCA review proceeds, it is wise to remember not let the perfect become the enemy of the good. Mexico and Canada are two of our most important trading partners. That strong partnership will continue to drive forward the U.S.’s economic competitiveness. This trilateral relationship should not be taken for granted, reflected in the 1,500 comments submitted to the U.S. Trade Representative (USTR) in December. Many stakeholders expressed support for the USMCA and many explicitly called for USMCA to be extended in those comments. Many of those public comments and testimony conveyed the singular importance of business certainty, which is best achieved by a timely conclusion to the review and extension of USMCA necessary to deliver business certainty in the U.S. More here.
Ranking Member Ron Wyden (D-OR)
Last night, the House voted to repeal Trump’s tariffs on Canada, imposed despite the USMCA and without the support of Congress. Trump’s chaotic tariffs are losing support across the political spectrum. Now the Senate needs to get that legislation to the President’s desk and deliver some relief. USMCA is a good agreement that passed with extraordinary bipartisan support. It promised to open up export opportunities for U.S. farmers and businesses, and it promised strong standards on labor and the environment. A trade agreement cannot achieve its intended goals unless it is strongly enforced. Since Trump took office last year, USTR has not begun a single enforcement case under USMCA. There are real and legitimate concerns about USMCA not living up to its promises, and the biggest culprit is this administration. If the executive branch will not do its job, then Congress needs to take back its constitutional power over trade. For the first four years after the USMCA was implemented, things were looking up. Trilateral trade reached $1.9 trillion in 2024, up nearly $400 billion. U.S. manufacturing hit an all-time high of nearly $3 trillion in 2024. USMCA fueled over $60 billion in agricultural exports. Random tariffs cause havoc on our supply chains, chilled investment, which has driven our allies towards our enemies. U.S. manufacturing contracted for the tenth straight time in December, with slumping orders and higher input costs. Exports to Canada fell 23 percent. Canada is instead strengthening its economic partnership with China. Early signs indicate that Trump is considering tearing up USMCA. USMCA delivered real wins. It included strong rules on labor and environment and new enforcement tools, such as the rapid response mechanism (RRM) to actually enforce trade laws. It created new opportunity for jobs and economic growth, as well as strengthened supply chains and political alliances with our neighbors, promoting North American competitiveness in global markets. Without USMCA in place, supply chains can be disrupted, prices go up, U.S. alliances unravel, and North America is less able to compete with China. That is why USMCA was backed by such a broad alliance. USMCA can only reach its full potential if the U.S. enforces strong rules. USTR should use the six-year review to deliver and give Americans what they bargained for. That is going to take a partnership with Congress, commitment to enforcement, and transparency. More here.
Kevin Brady, Former Chairman of House Ways & Means Committee; Senior Consultant, Akin
The USMCA negotiated by President Trump is the gold standard for U.S. trade agreements and a signature achievement of his first term. USMCA secured unprecedented bipartisan support. Due to its smart design of zero tariffs and low trade barriers on crucial products bought and sold by the U.S., its exemption from other tariff levies, and integrated supply chains across the three nations, the U.S. is economically stronger, more secure, and strategically positioned to win against aggressive foreign adversaries in the future, like China. As a result of USMCA, Canada and Mexico are now the U.S.’s top customers, investors, and suppliers, all in one. This is an unprecedented commitment to the U.S.’s success that no other country can claim. Together, they buy five times more Made-In-America products and services than any other country in the world. Nearly one-third of all U.S. exports are sold to Canada and Mexico, with 49 states counting them among their top three customers. Together, they are the largest investors in the U.S. Annual investment by the two has surged by 42 percent, approaching $900 billion last year. Mexico and Canada are already delivering on the mission to track foreign investment and the jobs it brings to the U.S. They are the U.S.’s most important suppliers, delivering on President Trump’s charge to strengthen supply chains for the U.S.’s national economic security. They lead the world in helping the U.S. establish a reliable and resilient industrial base that runs on nearby trusted materials. The most powerful economic argument for strengthening, preserving, and extending USMCA is that this proven partnership ensures the U.S. can compete and win against the most aggressive foreign competitors in the world. The success of USMCA is a result of Congress’ bipartisan leadership in shaping and improving it, reflected in overwhelming public support, and with three-quarters of Americans today viewing USMCA as good for the economy and standard of living. No trade relationship of this magnitude is perfect. The six-year review process offers an important opportunity for the U.S., Canada, and Mexico to build upon this strong and enduring relationship, starting with fully enforcing existing commitments. This review is, Ambassador Lighthizer assured us at the time, a critical tool to ensure increased oversight and input from Congress to the administration. USMCA is the most consequential trade agreement in the world and will only grow in importance as global competition intensifies, especially from China. We should strengthen it, improve it, preserve the special design networks, and extend it for the longest term possible to continue winning. That is what a successful review will accomplish. More here.
Eric Gottwald, Policy Specialist for Trade and International Economics, AFL-CIO
USMCA promised a different economic model for North American trade based on respect for workers’ rights and fair competition rather than NAFTA’s corporate-driven race to the bottom. Unfortunately, USMCA is failing to deliver for workers in all three countries. As we approach the 2026 joint review, USMCA should not be granted a sixteen-year extension without major reforms. USMCA was supposed to rebalance North American trade flows and narrow the U.S. chronically large, traded goods deficit with Mexico. The opposite has happened. Since USMCA came into force, the U.S. bilateral trade deficit with Mexico has exploded from $125 billion to $263 billion in 2025. This alarming data point tracks with announcements by major multinationals to close U.S. plants and offshore production to Mexico. Aside from core compliance failures, new challenges have arisen since USMCA came into effect. Chinese investment into Mexico more than doubled, raising concerns USMCA of being used as a backdoor for unfairly traded goods to enter the North American market. We agree with USTR Jamieson Greer that USMCA’s shortcomings are serious and that a rubber stamp of USMCA is not in the national interest. We strongly encourage Congress and the administration to use the leverage created by the sunset clause and joint review to insist on improving USMCA. More here.
Paul McCarthy, President & CEO, MEMA. The Vehicle Suppliers Association
USMCA is working, and its preservation is essential to U.S. competitiveness, job growth, and supply chain resilience. We are grateful for President Trump’s vision of more comprehensive and modern framework and strategic goal in creating USMCA to strengthen important economic, national security, and industrial connections. USMCA has delivered stability, and an essential foundation for operations, enabling competition in this highly competitive global market. USMCA has also strengthened supply chain resilience, giving the U.S. additional leverage to counterbalance increasing Chinese influence over global trade and its power and scale. We are supportive of the administration’s enforcement with respect to illegal transshipment. Companies cannot be disadvantaged by entities that disregard the rules. USMCA has delivered more U.S. jobs, more investment, stronger supply chains, and increased global competitiveness as a cornerstone of future growth. We urge you to preserve USMCA and provide the certainty needed to keep investing, innovating, and winning. More here.
Ted Vander Schaaf, Owner, Vander Schaaf Farms
There are targeted improvements for USMCA that we are counting on to ensure it fully delivers on its promises for U.S. farmers, with elements that must be strengthened as USMCA enters its upcoming review. Strong and enforceable trade agreements are essential, with the U.S. exporting billions in agricultural goods to Mexico and Canada. In 2020, USCMA was designed to improve trade by establishing new U.S. TRQs across a range of products for accessing the Canadian market and by limiting harmful Canadian export policies. Unfortunately, Canada has sidestepped some of these obligations and continues to administer some TRQs in a manner that restricts imports by reserving the vast majority of quota volumes for domestic processors who lack incentives to import. TRQ utilization remains well below negotiated levels, denying U.S. producers real market access and undermining USMCA. Canada has also skirted its USMCA export disciplines by adopting new workarounds that continue to allow the export of artificially low-priced products, undercutting U.S. processors both here at home and abroad. Mexican and U.S. industries frequently work together on a number of fronts to support farmers and consumers, and to increase consumption. Losing Mexico as a market would be extremely difficult to navigate and would result in dire consequences farms and co-ops. Although Mexico has been a clear success story under NAFTA and USMCA, one key obligation remains unfulfilled as Mexico has still not fully implemented specific protections, putting U.S. exporters at risk. Exports are critical not just for growth but for survival. A firm base depends on Canada upholding its end of the bargain and on preserving fully open trade flows with Mexico. Industry is counting on Congress and the administration to help us fix these issues and to secure a better, stronger USMCA for U.S. farmers. More here.
DISCUSSION
Chairman Crapo (R-ID): Could you give me some detail on what types of fixes we ought to put into place? Vander Schaaf: On Canada, we are looking at two issues. One of them is regarding their TRQs and how they are allocating those. It seems that they hand those out to people who basically cannot use them, and our exports never get exported because no one is requesting them. We need modifications to the language of that agreement so that it will be fully utilized as well. We have issues with how Canada is producing a lot of low-cost proteins that get dumped onto our market, which depresses the market for everyone. We would like additional language put into USCMCA that would modify it, so Canada is not able to lower their cost below ours and depress our markets through dumping products.
Chairman Crapo (R-ID): What impact does maintaining USMCA and our trading relationship with our closest neighbors have at the state and local level? Why does USMCA matter to U.S. and North American competitiveness, and why does it matter to quickly complete the review process? Brady: The reason USMCA works so well for the U.S. is twofold. It keeps zero tariffs for most of what we buy and produce here in the U.S. It has exemptions from other tariff levies and is integrated. In the 1,500 comments to USTR about USMCA, certainty in keeping that integration across all three countries was cited over and over again as key to USMCA’s success as it creates affordable sourcing across all countries and encourages investment into the U.S. as well as our North American partners. It makes us more competitive against China going forward, and that is the key to making North American trade work for the U.S.
Ranking Member Wyden (D-OR): What do you think of President Trump calling USMCA irrelevant and saying it provides no real advantage to the U.S.? Brady: Combining the strengths of our allies with ours is how we all become stronger. USMCA is a partnership with two strong allies that have made the U.S. stronger. The investment that has driven our economies is a powerful force. As a result of USMCA and our partnership with Canada and Mexico, we have weathered global recessions better than any other region. We are seeing companies reshoring both in the U.S. and in our trading partners. Canada and Mexico are our largest investors, and together are our biggest customers by far for those looking to sell Made in America products. The President has a negotiating style that is not for the faint of heart. It can be tough and harsh. No doubt it causes trading partners to think about the relationship with the U.S. in both positive and negative ways. But in the end, his goal is to rebalance trade in a way that continues to boost the U.S. economy. Canada and Mexico, as trading partners, have proven to help us compete and win here and around the world.
Ranking Member Wyden (D-OR): What do we need to do to ensure we build on rapid response and go even further on tough enforcement? Gottwald: Supporting independent unions in Mexico is critical because the unions know whether Mexico is playing by the rules, and whether the employer is honoring USMCA commitments. The best RRM cases are coming from independent unions in Mexico.
Senator Cornyn (R-TX): How can the U.S. use the USMCA joint review process to help reinforce compliance and accountability with Mexico under the 1944 Water Treaty to safeguard agricultural jobs? Brady: This has been an issue troubling for Texas for decades. Mexico is stepping forward to both unleash that water to Texas and pay back what is owed from the past. This is an opportunity to work with the administration to make sure that commitments are being kept and that USMCA is being enforced across the board. It is also an opportunity to improve it, working with Mexico and Canada across a whole range of areas and making sure USMCA continues working. Ambassador Greer identified several areas where Mexico has already come to the table. That is helpful but is also an opportunity to go beyond that to improve USMCA for economic security. Transshipments from China, investment in China, making sure that screening is done not just at the U.S. border but by our neighbors, as well as enforcement, is key. Facilitation across U.S. borders is a challenge, and ag products and others have trouble moving through border crossings as well. There is plenty of improvement to be made on lack of commitment.
Senator Cornyn (R-TX): What else do we need to do to prevent China from gaming USMCA through transshipment and FDI in Mexico? Brady: That should be a priority for review. There is a CFIUS-like review, tightening rules of origin, and other ways to make sure this agreement only benefits Mexico, Canada, and the U.S. USMCA and the 2020 renegotiation could not have come at a better time for the U.S. because in this new design, companies have been able to move away from the China-centric, controlled atmosphere, and back not just to nearshore in Mexico and Canada, but also across all three countries and anchor their supply chains in America. All of which positions us in a much stronger way against China going forward. My sense is that Mexico and Canada are coming to the table and eager to work with the U.S. on making sure transshipments are stopped and that there is investment screening. My prediction is that the economic security approaches in this review may be the most valuable improvement.
Senator Tillis (R-NC): What more should we do to update and reinforce our commitment to the Canadian and Mexican markets under USMCA? To what extent do tariffs imposed outside of USMCA risk damaging relationships with our biggest customers and make it more difficult to negotiate anything productive under USMCA over the long term? Brady: The President is imposing maximum leverage on a number of issues, including trying to rebalance these trade relationships. For USMCA, those tariffs are devastating because they break up the integration that occurs. If, in the review, those exemptions that have been there in the past are no longer there, and tariffs are imposed, incentives to reshore and near-shore are seriously harmed. I agree more barriers makes it tougher for us all to achieve the President’s goal of streamlined supply chains and critical minerals moving to the U.S. for a growing economy. It would have a serious effect; McCarthy: One of their biggest “whys” for USMCA is it fundamentally gives us economies of scale and scope so that we can compete with global competitors who often have higher scale. This is why we need to see that continuation and certainty about the future.
Senator Blackburn (R-TN): What are you seeing on Canada’s compliance with its TRQs, given concerns from farmers that Canada is not living up to its commitments? How is this affecting U.S. agricultural exports, such as soy? Vander Schaaf: We are seeing Canada not fully live up to their agreement. What we are asking for is to modify the language or bring Canada to the table to discuss their shortfalls and to try to improve USMCA language.
Senator Blackburn (R-TN): How can we simplify administrative and compliance burdens on manufacturers whose parts cross the border multiple times to preserve and strengthen manufacturing in the U.S.? Brady: I am hopeful the review will take steps to simplify and really streamline that process. Rules of origin are working for their mission, but the application is extremely burdensome. What our industries are looking for is a consistent interpretation across borders, an effort to modernize it, to both digitize and standardize it, and to have one playbook for our companies to be able to work from; McCarthy: I agree on how stringent those requirements are.
Senator Marshall (R-KS): Has USMCA lived up to what you expected it to be? What would happen to rural America if the upcoming USMCA review does not go well? Brady: From the economic standpoint, there is no question the President’s agreement delivered on all fronts. Are there areas where commitments need to be addressed? Absolutely. The review is the perfect time for Congress and the administration to join together to improve and strengthen it going forward. The key is to ensure the design of USMCA with zero tariffs on products, exemptions from other tariff levies like Section 232s, and three-country integration. That is what drives growth. The top priority is to maintain that design because it is so smart, unique around the world, and proven to be the secret sauce and strength. To improve it, which means strengthening it, look at ways to modernize but also to extend it longer term.
Senator Marshall (R-KS): Do you think Mexico has been a good and sincere partner in USMCA, particularly considering the benefits they received from tariffs on other countries? Brady: I do. They were quick to respond and came to the table immediately, not just with proposals but with real actions and solutions. It seems to me they are eager to try to address the President’s priorities here. President Sheinbaum has developed a good working relationship with the President, and I feel they are being good-faith partners in this review.
Senator Marshall (R-KS): Could you talk about the opportunities for increased exports to Mexico, such as ethanol, especially given the significant trade deficit and current challenges with rail capacity that need to be addressed? Vander Schaaf: Mexico is our greatest trading partner that we could have, and we could only expand on that. Mexico is a wide, vast canvas for us to continue to grow.
Senator Grassley (R-IA): What is the importance of congressional consultation in trade negotiations? Brady: It has proven to be extremely important to the U.S. This renegotiation could not have come at a better time for the U.S., because by preserving those zero tariffs and low trade barriers creating exemptions from other tariff levies, and maintaining the three-country integration, it has really positioned us not just to grow economically, but to be in a much better position to compete and win against the Chinas of the world going forward. USMCA has also caused a surge of investment from Mexico and Canada into the U.S., up 42 percent. Their investment in technology production in the U.S. has more than doubled, with investments in agriculture and in the supply chain as well. I do not think it was anticipated that we would see more jobs coming our direction as a result of the integration and low tariffs. USMCA has put us in a better position to compete when it comes to China.
Senator Grassley (R-IA): Which USMCA chapters have helped protect the U.S. and our supply from unfair practices, particularly from China? What benefits could result from repeating those chapters in a new agreement? Brady: What we saw in President Trump’s negotiation of USMCA was a major effort to improve the quality and make sure industries in the U.S. that had blossomed since the original NAFTA were part of USMCA. It also created and laid the foundation for companies that felt like they needed to be around the world to compete and were far too reliant on China. It created exactly the right incentives, along with a new tax code that also made us much more competitive and created incentives to reshore. USMCA at the time, along with the new, more modern tax code, has really driven this growth and positioned us well. One of the most important benefits of USMCA is being able to compete and win against our foreign competitors like China.
Senator Whitehouse (D-RI): What is the rationale for extending RRM to environmental violations? Gottwald: That is key to maintaining fair competition. In Mexico, lower environmental standards provide a competitive advantage. We also see non-compliance with Mexico’s environmental laws on air and water. A facility-specific enforcement approach, which has been successful under the labor chapter in USMCA, could be extended to the environment to really target the bad actors and use pressure to get compliance.
Senator Whitehouse (D-RI): Is Investor-State Dispute Settlement (ISDS) an incentive for a company to move operations abroad, knowing it can rely on that kind of political risk insurance? Gottwald: Absolutely. ISDS is a form of insurance. Companies are able to access it without approval from the government, so it is an incentive to offshore.
Senator Daines (R-MT): Do you think the joint review could be used as an effective tool to strengthen USMCA, such as by tightening rules of origin so that benefits only flow to member countries, and secure better terms for U.S. producers? Brady: No question. This is what the review is designed to do. At the time, the sixteen-year sunset and the six-year review were unique and, at times, controversial. As laid out to Congress, this was not designed for termination, but for increased oversight and for Congress to work with the administration to see how USMCA has worked and where it needs to be improved. These are the types of discussions Ambassador Greer needs to be bringing to the table, and that represent an opportunity to strengthen provisions.
Senator Daines (R-MT): What would ten years of annual revisitations without an extension mean for U.S. stakeholders? Brady: That uncertainty could not come at a worse time. It would lower the economic value of that agreement. Right now, this agreement is working for the U.S., Mexico, and Canada because it incentivizes long-term investment in North America. That is what is driving jobs and certainly driving competitiveness. The longer this agreement is extended, the more long-term investment we are going to see in the U.S. and North America. I am hopeful that that is not the outcome of this. Strengthening and extending USMCA for the long term is what is going to make President Trump’s trade agreement even more effective.
Senator Cassidy (R-LA): Should we have explicit restrictions on Chinese-manufactured components and software, given rising concerns about CCP surveillance? Should the trilateral agreement include export controls on semiconductors and AI chips? Brady: That seems to be one of the highest priorities of the President and the Ambassador. It reflects the concerns from Congress in this area as well. I predict economic security improvements and discussions in this review will be of the highest priority and may well be the most significant improvements in this agreement going forward. I expect China issues, between transshipment and investment screening, is going to be one of the most consequential discussions we have in the review.
Senator Cassidy (R-LA): Do you agree that trade agreements should prevent illegally harvested products from accessing U.S. markets? Brady: This review is an opportunity to bring such issues to the administration.
Senator Warnock (D-GA): How has uncertainty around the future of USMCA affected investment decisions? Would investment decrease if the U.S. were to unilaterally withdraw from USMCA? Brady: In the comments USTR received about USMCA, certainty was the most frequent point made. The President understands the importance of this agreement and it has succeeded in a big way, but there is room for improvement. He wants the strongest terms possible going forward. The review is an opportunity to reset that certainty, because it has driven investment into the U.S. from Mexico and Canada. Certainty is one of the strengths of USMCA, and it, especially for long-term investment, allows us to compete and win against China. Withdrawal from USMCA would result in fewer jobs and investments, with slower economic growth. We would be disadvantaged in competition against China.
Senator Welch (D-VT): What is your view on legislation that would give farmers the legal right to repair their own equipment, especially given rising equipment costs and restrictive software? Vander Schaaf: When it comes to repairing our own equipment, it is imperative that we have the ability to do so. As equipment has become more technological, it has become more difficult to repair equipment. It has been disappointing that manufacturers have taken some of their information and made it proprietary, making it impossible to fix equipment ourselves.
Senator Cantwell (D-WA): Do you consider the President’s rhetoric a threat to achieving a stronger U.S.-Mexico relationship? Does it undermine our ability to position Mexico as a stronger competitor to China? Brady: The President wants to get the best possible deal for the U.S. in USMCA and sees its value. There are areas for growth and improvement. He understands how the partnership and USMCA have positioned the U.S. to be able not just to grow, but to compete and win against China. His style has been aggressive and tough in these agreements, but it should not interfere with strengthening, preserving, and extending USMCA.
Senator Cantwell (D-WA): If we want to counter China, why are we not pursuing a broader Americas trade agreement, like a U.S.–South America free trade agreement, instead missing the opportunity to resolve capacity-building issues? Gottwald: There is a lot of work to do, with enforcement challenges raised on labor and environment across the board. There is leverage in this joint review. We need Congress, administration to lean on Mexico and Canada to fix the issues, and at the same time preserve certainty.
Senator Warren (D-MA): Are Trump’s across-the-board tariffs bringing back manufacturing jobs to the U.S.? Gottwald: The short answer is no. From the across-the-board tariffs imposed in April, we have not seen reshoring manufacturing jobs as a result. The latest data show that, year over year, we have lost 70,000 manufacturing jobs.
Senator Warren (D-MA): How could the U.S. use its leverage to strengthen USMCA’s RRM enforcement? Gottwald: It is not perfect, and we could make it better. At times, we have seen that when cases go to arbitration under the mechanism, they have dragged on a little too long.
Senator Lujan (D-AZ): What is your advice on how to better engage and bridge differences on a trade agreement? Brady: There is no question that the economic success of USMCA is because the President and his team set out to create bipartisan support. This review is another opportunity and a way to have more oversight and input. Please preserve that smart design, because it is working, and the integration between the three countries is so important.