U.S. retailers and consumers have access to a wide variety of affordable products thanks to free trade. After China, Canada and Mexico are the second- and third-largest exporters to the United States; the two countries are also the leading importers of American goods. The retail industry imports $182 billion worth of goods from NAFTA partners.
As NAFTA negotiations stall, however, there’s a lot at stake: American consumers could face $5.3 billion in higher costs if the agreement is terminated. Countless products that U.S. consumers use every day would be impacted, including chocolate, asparagus, watermelon, beef and jeans.
U.S. retailers import $2 billion worth of chocolate from Canada and Mexico. But without NAFTA, 10 percent of all chocolate consumed in the U.S. would be hit by tariffs at a total cost of $261 million annually. On Valentine’s Day alone, tariffs could cost U.S. consumers an additional $13 million.
It’s not just sweets that would be affected. More than half the asparagus purchased in U.S. stores is produced in Mexico, and tariffs would result in $50 million in higher costs annually. And without NAFTA, American consumers would pay 17 percent more for watermelon. The total impact of tariffs on fresh and frozen beef, meanwhile, would be $284.2 million.
The value chain for products such as denim jeans includes multiple production stages. The integrated supply chain means products would be hit with tariffs many times before arriving in stores: U.S. cotton is exported to Mexico to make fabric; U.S. fabric and accessories are exported to Mexico to make jeans; and the finished product is imported back to the U.S. The full supply chain cost increase would be $166 million annually.