Ending USMCA could fuel higher US consumer prices

The US government's recent refusal to renew the United States-Mexico-Canada Agreement (USMCA) left the trade pact in effect but its future unclear. The treaty will be subject to annual review for a decade, unless the parties eventually renew or end it. President Donald Trump has mentioned the possibility of terminating the deal and has separately talked about imposing a global tariff of 15 percent.

This uncertainty raises questions about how the USMCA's termination would affect US households. The data suggest that ending the agreement and imposing 15 percent tariffs on goods from Canada and…