The Senate Finance Committee agrees on two things: First, the U.S. Mexico and Canada Agreement (USMCA) isn’t perfect and a number of issues need fixing. Second, they don’t want tariffs. And even though no one on the committee mentioned steel and aluminum tariffs during a Feb. 12 hearing on USMCA, former House Ways & Means Committee Chairman Kevin Brady (R-TX-8) [Testimony] said as one of the witnesses that exempting Mexico and Canada from the Section 232 tariffs were a “top priority” in his view. No one brought the subject up again after that.
The USMCA will undergo a congressional review process beginning July 1.
Brady said that Mexico has already been working closely with the United States, especially on U.S.-based investment and assuring China does not take advantage of the duty-free benefits.
Canada may be another story. Although no one mentioned it at the hearing, Canada has tip-toed closer to China recently with a deal on Chinese EVs, but for now that is just an import quota. Those vehicles could be exported to the U.S. but would face the Section 232 25% tariffs on cars and car parts, or the 100% tariff on China EVs if simply transshipped here. Canada is unlikely to test those waters anytime soon.
Both Chairman Mike Crapo (R-ID) [Testimony] and Ranking Member Ron Wyden (D-OR) [Testimony] made two important points – the benefits of USMCA show up in the trade figures. These numbers will make it hard for the Trump administration to simply scrap USMCA, a policy Brady kept insisting was a Trump-led, bipartisan success story, with some chinks in the armor that can be repaired. Trump called the USMCA “irrelevant to the U.S.” in January. This could mean that two separate trade agreements are plausible. The Senate Finance Committee is against that, and will reinsert itself in the trade agenda if that becomes a possibility. CPA has argued for replacing USMCA with two bilateral agreements to restore U.S. trade sovereignty, in this report from Nov. 2025.
“We should have more say on trade and tariffs…which we are not doing now,” Wyden said in his opening remarks.
The USMCA trade numbers look like this; U.S. exports to Canada: $349.9 billion in 2024; U.S. exports to Mexico: $334.03 billion.
By comparison, U.S. exports to the European Union, a much richer and larger economy than Canada and Mexico, hit $367.78 billion in 2024. U.S. exports to China were $143.2 billion in 2024.
Brady was often leaned on as the rational, statesman voice on USMCA during the hearing. Brady in fact was the USMCA salesman.
“They buy more U.S. products than any other country(ies) in the world and since USMCA took effect, their investments here have surged by 42% and investments in manufacturing by them have grown nearly 20%,” Brady said.
Senate Finance Hearing: Pro-USMCA and Decisively Anti-Tariff on Mexico and Canada
The Senate Finance Committee agrees on two things: First, the U.S. Mexico and Canada Agreement (USMCA) isn’t perfect and a number of issues need fixing. Second, they don’t want tariffs. And even though no one on the committee mentioned steel and aluminum tariffs during a Feb. 12 hearing on USMCA, former House Ways & Means Committee Chairman Kevin Brady (R-TX-8) [Testimony] said as one of the witnesses that exempting Mexico and Canada from the Section 232 tariffs were a “top priority” in his view. No one brought the subject up again after that.
The USMCA will undergo a congressional review process beginning July 1.
Brady said that Mexico has already been working closely with the United States, especially on U.S.-based investment and assuring China does not take advantage of the duty-free benefits.
Canada may be another story. Although no one mentioned it at the hearing, Canada has tip-toed closer to China recently with a deal on Chinese EVs, but for now that is just an import quota. Those vehicles could be exported to the U.S. but would face the Section 232 25% tariffs on cars and car parts, or the 100% tariff on China EVs if simply transshipped here. Canada is unlikely to test those waters anytime soon.
Both Chairman Mike Crapo (R-ID) [Testimony] and Ranking Member Ron Wyden (D-OR) [Testimony] made two important points – the benefits of USMCA show up in the trade figures. These numbers will make it hard for the Trump administration to simply scrap USMCA, a policy Brady kept insisting was a Trump-led, bipartisan success story, with some chinks in the armor that can be repaired. Trump called the USMCA “irrelevant to the U.S.” in January. This could mean that two separate trade agreements are plausible. The Senate Finance Committee is against that, and will reinsert itself in the trade agenda if that becomes a possibility. CPA has argued for replacing USMCA with two bilateral agreements to restore U.S. trade sovereignty, in this report from Nov. 2025.
“We should have more say on trade and tariffs…which we are not doing now,” Wyden said in his opening remarks.
The USMCA trade numbers look like this; U.S. exports to Canada: $349.9 billion in 2024; U.S. exports to Mexico: $334.03 billion.
By comparison, U.S. exports to the European Union, a much richer and larger economy than Canada and Mexico, hit $367.78 billion in 2024. U.S. exports to China were $143.2 billion in 2024.
Brady was often leaned on as the rational, statesman voice on USMCA during the hearing. Brady in fact was the USMCA salesman.
“They buy more U.S. products than any other country(ies) in the world and since USMCA took effect, their investments here have surged by 42% and investments in manufacturing by them have grown nearly 20%,” Brady said.
Tariffs in the Crosshairs
The Democrats all support renewal of USMCA. Keep in mind that earlier in the week, House Democrats voted unanimously in favor of a resolution condemning tariffs with a separate resolution proposed by Gregory W. Meeks (D-NY-5), Ranking Member of the House Foreign Affairs Committee, to remove tariffs on Canada.
There are tariffs on Canada for products that do not meet local content requirements, and the Section 232 tariffs on steel and aluminum. Again, steel and aluminum were never mentioned in the hearing.
Meeks’ resolution was a joint resolution (a similar one passed the Senate in November), which can have the force of law, but of course President Trump will never sign a law condemning his own policy. Meeks introduced a resolution last spring to terminate the national emergency Trump declared on fentanyl but that vote was not allowed by Speaker of the House Mike Johnson (R-LA-4) until the week of Feb. 9.
Despite bipartisan support of USMCA, the Democrats’ panel pick was Eric Gottwald, Policy Specialist for Trade and International Economics at the AFL-CIO [Testimony]. Gottwald was the main critic. He said the AFL-CIO endorsed USMCA in 2019, calling NAFTA “deeply flawed.” But he now thinks “the agreement is failing to deliver for workers and the vast majority of workers in Mexico make unconscionably low pay compared to Americans.”
No one is asking for the USMCA to be rubber stamped as-is.
As usual, much of the conversation centered on agriculture exports more than manufactured goods. Crapo and Wyden did their usual dance, going back and forth about which state had the best potatoes, Idaho or Oregon.
One Crapo witness, Ted Vander Schaaf, a dairy farmer from Idaho [Testimony] lamented about Canada’s dairy quotas. It’s not that he was against quotas. He said that Canada’s quotas are allotted to companies who are not big importers. For Canada, it’s a clever way to protect its home dairy market. Yet, even here Schaaf said that dairy exports were doing well in USMCA and he was investing.
“It’s wise for us not to make perfect become the enemy of the good,” Crapo said.
Countering China and business certainty were sold as a reason to maintain USMCA.
“Mexico and Canada are two of our most important trading partners and those partners will drive forward our economic competitiveness,” Crapo said. “They will not be taken for granted. We received over 1,500 comments on this and they all support the USMCA and want the agreement extended. They want business certainty, which is best achieved by the extension of the agreement.”
Paul McCarthy, President & CEO of MEMA, the Vehicle Suppliers Association in Washington DC [Testimony] said domestic auto parts production increased, with new investments. He shared two examples of investments by MEMA members, but did not name the companies. One was a $20 million investment in Indiana with plans to increase staff by 25% this year. Another was a company that mostly exports to Mexico; they’re investing a million dollars in expansion.
“Our members truly build here. We identify USMCA as our primary manufacturing and resourcing region and this counters China’s scale in the auto industry,” McCarthy said. “We don’t support transshipment and companies should not be getting any benefits of duty free access if they do not meet local content requirements,” he said, a concern which likely led to the Section 232 auto tariffs on Mexico and Canada in the first place. Those tariffs were initially for all cars and car parts but were quickly removed to focus on imported parts and cars that get shipped to the U.S. at a low Most Favored Nation rate close to 4%.
America First Takes a Beating
Admittedly, tariffs have had a tough week. Many have cheered that the America First Trade Policy agenda has taken a beating. Some of this disdain could be due to the administration’s use of tariffs as a sanction tool rather than as a revenue source or protection. Businesses will say they are not seeing clear enough direction, a core part of Crapo and Wyden’s argument.
A New York Federal Reserve report published Feb. 12 says Americans are paying “90% of the tariff burden.” This does not mean consumers. Inflation remains a services industry problem, not a manufactured goods problem, as the latest inflation data shows.
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CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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