White House’s Win-Lose Strategy on Trade Pacts Could Imperil U.S. Jobs

In Economy On
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But as economic policy, the feisty words — quickly downgraded to a pledge to “renegotiate” terms of trade with Mexico and Canada — potentially imperil significant swaths of the American economy.

A rupture to trade with those two countries would disrupt the global supply chain, jeopardizing factories in the United States that depend on imported components in making their wares. It could raise the costs of shoes, clothing and other consumer goods, while discouraging investment amid the uncertainty. It would threaten reprisals from trading partners, risking barriers to American exports.

It could cost jobs in the name of saving them.

“Re-creating trade barriers between the United States and Mexico will hurt many of the people Trump is ostensibly trying to help,” said Pietra Rivoli, a trade expert at the McDonough School of Business at Georgetown. “We can expect higher prices for many consumer goods, and we can expect negative effects for our many firms that rely on Mexico for inputs.”

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