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Industry Associations View USMCA With Cautious Optimism


After more than a year of tense negotiations, the United States, Canada and Mexico unveiled an updated trade agreement to replace the North American Free Trade Agreement (NAFTA). 

The new accord, which will be called the United States-Mexico-Canada Agreement (USMCA), must now be signed by all parties (expected before Dec. 1) and then ratified within each country, a process that could take months or even years. Meanwhile, NAFTA will remain in effect until it is either replaced by USMCA or the United States, Mexico or Canada unilaterally withdraw.

Significantly, the USMCA is silent regarding the United States' existing Section 232 tariffs on aluminum and steel from Canada and Mexico.  

The Associated Equipment Distributors (AED) and Association of Equipment Manufacturers (AEM) weighed in on the new deal.

"AED welcomes the announcement that a new trade agreement has been reached and it includes two key U.S. allies, Canada and Mexico," said AED's President and CEO Brian P. McGuire. "We now encourage the administration to build on this momentum and work diligently to come to a resolution with Canada and Mexico on steel tariffs, which are disrupting supply chains, increasing costs for equipment purchasers and exasperating shortages of new construction equipment to rebuild America."

AED President Dennis Slater said, “The United States-Mexico-Canada Agreement (USMCA) is a step in the right direction. Trade agreements provide better access to customers across the globe and help us add to the 1.3 million jobs our industry supports in the United States. We urge this administration to continue working closely with the Canadian and Mexican governments to enact policies that promote continued economic growth for our industry.”

Nearly 30 percent of all equipment produced in the United States is intended for export, and Canada and Mexico are the first and second-largest export markets for both U.S. construction and agricultural equipment. Since the creation of NAFTA two decades ago, the equipment manufacturing industry has benefited greatly from duty-free access to our industry’s largest two export markets, Canada and Mexico, according to AEM.