Mexico has now become the biggest U.S. trading partner, jumping ahead of Canada and China that have previously held the top spot, according to recent government data.
Transactions with Mexico made up 15 percent of U.S. trade in February, according to federal data released last week, edging out Canada at 14.2 percent and China at 13.9 percent.
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Mexico’s emergence as the largest U.S. trading partner highlights the stakes of President TrumpDonald John TrumpForget the spin: Five unrefuted Mueller Report revelations Lara Trump: Merkel admitting migrants ‘one of the worst things that ever happened to Germany’ Financial satisfaction hits record high: survey MORE‘s push to win congressional approval for a new North American Free Trade Agreement (NAFTA).
Trump, Canadian Prime Minister Justin TrudeauJustin Pierre James TrudeauMexico emerges as biggest US trading partner Canada to levy carbon tax if provinces don’t Trudeau asks Canadian government to study full ban on handguns and assault weapons MORE and former Mexican President Enrique Peña Nieto agreed in September to an updated version of NAFTA. The new deal, called the U.S., Mexico, Canada Agreement (USMCA), is pending legislative approval in all three countries and faces long odds in the Democratic-controlled House.
Democratic lawmakers, including Speaker Nancy PelosiNancy Patricia D'Alesandro PelosiDemocrats are playing voters on their fantasies for impeachment The Hill’s Morning Report – Trump tells House investigators ‘no’ Seven big decisions facing Biden in 2020 primary MORE (D-Calif.), have demanded tougher labor, environmental and enforcement provisions to prevent future U.S. job losses.
While some of these issues could be addressed in follow-up legislation, others would require a renegotiation of the deal itself. The Trump administration has rules out further talks, and Republicans have called on Democrats to accept the deal proposed by the president.
Trump has been fiercely critical of previous U.S. trade deals including NAFTA, which he’s called the “worst” trade agreement in American history. The president has pledged to pull the U.S. out of NAFTA if the USMCA is not approved by Congress, threatening the continent with a massive economic calamity.
The U.S., Mexican and Canadian economies have become closely integrated since NAFTA’s 1994 enactment. Companies in each country send parts and products back and forth through a continental supply chain that would be severely disrupted without a free trade agreement.
Leaving NAFTA would also lead to drastic increases in prices for food and consumer goods, a potential political nightmare for the president as he seeks reelection.