Why it Matters
The House Agriculture Committee hearing on June 10 to discuss "Agricultural Perspectives On The Future Of The USMCA" came as the President has called the United States-Mexico-Canada Agreement "irrelevant" and also announced a new 10 percent tariff on Canada, Mexico, and the EU. The USMCA is scheduled for review by these respective governments beginning July 1.
The U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA) did not make themselves available for this congressional hearing.
The Big Picture
The USMCA, a trilateral trade agreement, became effective on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). This agreement maintains tariff-free treatment for certain agricultural products and expands market access for various U.S.-grown commodities.
In 2024, agricultural and seafood exports to Canada and Mexico contributed $149 billion to the U.S. economy, supporting nearly 500,000 American jobs and generating $36 million in wages. Since its inception, Mexico and Canada have collectively purchased over $60 billion in U.S. agricultural commodities annually, representing approximately one-third of all U.S. agricultural exports.
These relationships with Mexico and Canada benefit family farmers financially and support jobs throughout the food supply chain. The USMCA was negotiated by the first Trump administration and signed by President Trump.
What They're Saying
The core dispute revolved around the continued effectiveness and political will to uphold the USMCA. The hearing featured testimony from six witnesses representing various agricultural sectors.
- Michael Lichte, chief insights and optimization officer, Dairy Farmers of America stated, "Export demand accounts for approximately 17 percent of U.S. milk production."
- Kristen Sawin, vice president of government and corporate Affairs, Weyerhaeuser noted, "U.S. forest product manufacturers continue to face challenges under Chapter 10 Binational Panel Review Process."
- Jamie Beyer, executive committee member, American Soybean Association highlighted that "Family farmers have largely relied on Canada and Mexico as reliable markets."
Political Stakes
For the administration, the President's statements regarding the USMCA and new tariffs create more uncertainty for American agriculture. Mexico and Canada remain the top agricultural trade partners for the U.S. The USMCA is the most commercially significant trade agreement for the U.S. dairy industry. For instance, Mexico and Canada together account for over 40 percent of all U.S. dairy exports by value. The ability to access and compete in global markets directly supports milk prices for dairy farmers and investments in rural America. In Minnesota alone, agricultural exports to Mexico and Canada exceeded $2 billion last year, supporting nearly 10,000 jobs.
Yes, But
Despite the clear benefits outlined by agricultural stakeholders, the President has questioned the USMCA, asking who would ever sign such an agreement. This stance creates a disconnect between the administration's rhetoric and the economic realities faced by farmers and agricultural businesses. The lack of participation from the USTR and USDA at the hearing further underscores the potential for policy shifts that could impact trade relations.
What's Next
With the USMCA scheduled for review by the respective governments in July, the outcome of this congressional hearing and the administration's future actions will be closely watched by the agricultural sector.
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