Foley & Lardner LLP partner Gregory Husisian assessed the impact of tariffs on the viability of the U.S. – Mexico – Canada Agreement (USMCA) in The Wall Street Journal, IndustryWeek, Autoweek, Yahoo! Autos, and MSN.
As the Trump administration’s trade policy comes into focus, Husisian, co-chair of Foley’s International Trade & National Security Practice, pointed to Mexico’s reliance on the United States for over 80% of its exports as leaving the country with few trading partner alternatives in the short and medium term.
“It’s not like Mexico can move to the other major trading partner, which would be either the EU, or China,” he told The Wall Street Journal. “They’ve been trying to court the EU for years, and it’s only resulted in a moderate uptick,” he explained.
The USMCA “has been a very real success story, particularly for the Mexican automotive sector, and they’re not going to give up on that easily,” Husisian added.
Though the tariffs conflict with the USMCA, Husisian said in IndustryWeek that while the agreement does include dispute mechanisms, the processes are slow, “especially taking into account the possibility of appeals.”
“Even if there is an adverse ruling and appellate ruling against the United States, it may be necessary for the foreign government to go to U.S. court to have the rulings followed, as happened when the United States lost a dispute involving antidumping and countervailing duties imposed on softwood lumber from Canada,” Husisian continued. “Add it all up, and it easily can take years to reverse even executive actions that blatantly violate the USMCA.”
Husisian said all three countries have good reasons to keep the USMCA in effect but that “the question is in what form,” noting the possibility of Mexico and Canada establishing individual bilateral agreements with the United States instead.
Earlier, when President Trump announced in late February that U.S. tariffs on both countries were on schedule to begin on March 4, Husisian highlighted the uncertainty automakers are facing in Autoweek, “Right now, it would be virtually impossible for the auto sector to be risk-planning for the next 10 days.”
