Edward Conard

Top Ten New York Times Bestselling Author

  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

AI Summary. An analytics firm estimates that 50% of Mexican exports and 38% of Canadian exports entered the U.S. duty-free under the North American trade pact, while about 40% of U.S. imports from the two countries entered duty-free outside it, leaving roughly 10% of Mexican and 22% of Canadian exports facing any tariffs.

Chao Deng Wall Street Journal
Date Posted:

In 2024, the US imported $1B of duty-free goods per day from Canada and Mexico under USMCA. Firms may be liable for $250mm per day in new tariffs.

How much of Canadian and Mexican exports actually face tariffs?

Core argument: Trade Partnership Worldwide estimated that in 2024 about 10% of Mexican exports to the U.S. faced any tariffs, with 50% entering duty-free under USMCA, while roughly 40% of U.S. imports from Canada and Mexico fell outside USMCA yet still entered duty-free.

The analytics firm Trade Partnership Worldwide (TPW) estimated that in 2024, 50% of Mexican exports and 38% of Canadian exports entered the U.S. duty-free under USMCA. About 40% of U.S. imports from Canada and Mexico fell outside USMCA but still passed through duty-free. The U.S. imposes no tariffs on a host of products, regardless of the supplier country. Only about 10% of total Mexican exports to the U.S. in 2024 faced any tariffs at all. In 2024, only about 22% of Canadian exports to the U.S. faced any tariffs. This included nearly all oil with low tariff rates, rather than products that couldn’t comply with USMCA rules. Generally speaking, under the USMCA, which took effect during Trump’s first term, products enter the U.S. duty-free if businesses can show they comply with certain rules regarding the origins of those products’ components. Because USMCA rules are so complicated, businesses have sometimes chosen to pay a tariff on a given product instead of expending time and money to figure out whether it is USMCA-compliant, according to trade experts.

Takeaways by Macro Roundup® AI

  1. Trade Partnership Worldwide estimated that in 2024 about 10% of Mexican exports to the U.S. faced any tariffs, with 50% entering duty-free under USMCA, while roughly 40% of U.S. imports from Canada and Mexico fell outside USMCA yet still entered duty-free.
  2. Trade experts say USMCA's rules are complicated enough that businesses have sometimes paid a tariff on a product instead of spending time and money determining whether it qualifies as USMCA-compliant.
  3. Trade Partnership Worldwide estimated that in 2024, 38% of Canadian exports entered the U.S. duty-free under USMCA and about 22% faced any tariffs, including nearly all oil at low tariff rates.

Related Articles:

  • The Fiscal, Economic, and Distributional Effects of 20% Tariffs on China and 25% Tariffs on Canada and Mexico — The authors estimate that 25% tariffs on Canada and Mexico plus 20% tariffs on China raise the US effective tariff rate by 7 percentage points to its highest since 1943, lifting the price level 1.0–1.2% and costing households an average $1,600–2,000. They project the economy is persistently 0.3–0.4% smaller.
  • A User’s Guide to Restructuring the Global Trading System — During the 2018–2019 U.S.–China trade war, the effective tariff rate on Chinese imports rose 17.9 percentage points while the renminbi depreciated 13.7% against the dollar, leaving after-tariff import prices in dollars up just 4.1%. The author argues this currency offset of more than three-fourths of the tariff explains why inflation pressure was negligible.
  • Tariffs and Exchange Rates (and Stephen Miran) — The author argues that a universal tariff would prompt enough dollar appreciation to make US exports more expensive abroad, reducing trade flows in both directions while leaving the trade deficit roughly unchanged. Attempting to offset the export drag through deregulation would shift production away from import-competing goods, again leaving a similar trade deficit.
Showing 56 database articles primarily about Trade (not deficits)