WASHINGTON \u2013 Tourists from Chattanooga check into beach resorts in Cancun. Canadian auto parts feed factories in the American Midwest \u2014 and vice versa. Happy hour revelers raise glasses of Mexican tequila and mezcal at bars in Seattle.<\/p>\n
It adds up. The United States trades $1.9 trillion a year \u2014 $5 billion a day \u2014 worth of goods and services with its neighbors, Canada and Mexico. They have supplanted China<\/a> as America’s top two trading partners. <\/p>\n So the stakes are high when it comes to fiddling with the rules that govern trade between the three countries. And after a year of President Donald Trump\u2019s chaotic tariff policies, many U.S., Canadian and Mexican businesses would welcome the return of stability across North America.<\/p>\n They are not likely to get it.<\/p>\n The regional trade pact \u2014 the U.S.-Mexico-Canada Agreement or USMCA \u2014 that Trump negotiated and boasted<\/a> about in his first term comes up for renewal Wednesday, a process that is likely to last months, maybe longer.<\/p>\n And the path forward is lined with landmines.<\/p>\n \u201cThere\u2019s going to be a lot of drama this summer,” Diego Marroqu\u00edn Bitar, a fellow in the America\u2019s program at the Center for Strategic and International Studies, said last week at a USMCA forum sponsored by the Cato Institute.<\/p>\n A bumpy road ahead for North American trade<\/p>\n The U.S. is making demands that could effectively force Canada and Mexico to surrender some automaking production to the United States. That might bring more auto factory jobs to the United States. But it would also upend established supply chains and would push up U.S. prices for new cars that now average nearly $50,000 at a time when American consumers are already furious about the high cost of living.<\/p>\n Trump, characteristically, has added to the tension by threatening to pull out of his own agreement altogether.<\/p>\n In 2020, the USMCA replaced the 1994 North American Free Trade Agreement, which tore down most trade barriers between the three North American countries.<\/p>\n Trump and other critics had called NAFTA a job killer because it encouraged U.S. companies to move factories south of the border to take advantage of low-wage Mexican labor, then ship goods back to the United States duty free.<\/p>\n