TO: Office of the United States Trade Representative
FROM: Bryan Riley, National Taxpayers Union
RE: Joint Review of USMCA
Docket ID: USTR-2025-0004
DATE: November 3, 2025
I am Bryan Riley, Director of the Free Trade Initiative at National Taxpayers Union (NTU). Founded in 1969, NTU is the oldest taxpayer group in the United States. We serve as the “Voice of America’s Taxpayers” and strive to represent their best interests before governments at all levels. We appreciate the opportunity to submit the following suggestions regarding the Joint Review of the U.S.-Mexico-Canada Agreement (USMCA).
As a starting point, NTU encourages the Trump Administration to agree with Canada and Mexico to extend USMCA and to maintain the beneficial elements of USMCA that are working well. This includes keeping both Canada and Mexico as USMCA partners to maximize the benefits of North American supply chains and maintaining USMCA’s existing reciprocal zero-tariff trade provisions.
We further encourage using this review period to improve USMCA by identifying areas where each country deviates from zero-tariff reciprocity. These exceptions reduce USMCA’s benefits, and the United States should lead efforts to eliminate them to the maximum practical extent.
Along the same lines, the United States should pursue opportunities to improve USMCA by modernizing it. For example, USMCA could be enhanced by specifying that governments may not impose digital services taxes that discriminate against U.S. providers. This review also provides an opportunity to consider ways an updated USMCA can boost cutting-edge technologies ranging from artificial intelligence to the development of lifesaving medical and pharmaceutical goods to the production of semiconductor chips.1
NTU believes the national security exception in USMCA should be improved. Currently, Canada or Mexico could hypothetically restrict imports of U.S. genetically modified corn, dairy products, or any other good or service simply by claiming a national security exception. That’s because, under Article 32.2 of USMCA, any country can deviate from its USMCA obligations and apply any restriction “that it considers necessary” for its essential security interests.
This loophole allows countries to claim exceptions for virtually any product and effectively makes all USMCA provisions optional.2
NTU further encourages using this opportunity to remove provisions that do not directly pertain to trade and investment. Trade agreements should not be broad-based charters like that of the European Union that would subject U.S. domestic policies to foreign review. The focus should be on removing barriers to trade and investment, not creating new costly roadblocks. For example, USMCA includes provisions relating to minimum wage laws, sexual orientation and gender identity, and sustainable development. These are domestic issues, and it is unwise to include them in USMCA or other trade agreements.
One significant area where USMCA modified the North American Free Trade Agreement (NAFTA) was with respect to motor vehicle trade. In 2019, the U.S. International Trade Commission (USITC) projected that changes to NAFTA’s rules of origin would increase car and truck prices in the United States.3 A July 2025 USITC report included a survey of 22 manufacturers, which found that most of the sourcing changes required to meet USMCA’s rules of origin increased production costs.4 This review should evaluate opportunities to improve these provisions of USMCA, given the importance of the automotive industry to the U.S. economy and the benefits of providing more affordable transportation for U.S. households.
An increasing percentage of imports from Canada and Mexico are classified as compliant with USMCA and therefore not subject to the tariffs the Trump Administration has applied to imports. This is, in part, because USMCA-compliant imports are largely exempt from tariffs imposed under the International Emergency Economic Powers Act.5 Qualifying for this exemption could present a compliance burden for small businesses that lack the resources of large corporations. NTU encourages USTR to consider ways to streamline USMCA paperwork and reduce costs so that small businesses can take full advantage of its benefits.
Finally, NTU suggests adding a formal accession process to allow other countries to join USMCA. The United States risks being left behind as the European Union pursues a trade agreement with Mercosur, China joins an expanded Association of Southeast Asian Nations (ASEAN) pact, and the United Kingdom joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.6 Creating a strong USMCA that other countries want to join would allow the United States to lead, not stand on the sidelines.
These specific recommendations align with NTU’s overall support for trade negotiations that pursue the goal of zero tariffs, zero subsidies, and zero non-tariff barriers. Such agreements reduce taxes for U.S. households, expand export opportunities, and contribute to our economic strength. NTU appreciates the opportunity to comment, and looks forward to an expansion of mutually beneficial trade and investment under USMCA.
1 Paul Triolo, “Building a long-term North American semiconductor ecosystem,” Brookings (March 5 2025), available at https://www.brookings.edu/articles/building-a-long-term-north-american-semiconductor-ecosystem/.
2 Bryan Riley, “Biden Administration Unleashes the Use of ‘Anything Under Sun’ to Restrict Exports of American-Made Goods and Services,” Publications, National Taxpayers Union (January 6, 2023), https://www.ntu.org/publications/detail/biden-administration-unleashes-the-use-of-anything-under-sun-to-restrict-exports-of-american-made-goods-and-services.
3 U.S. International Trade Commission, U.S.-Mexico-Canada Trade Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors (Publication No. 4889, Investigation No. TPA 105-003, April 2019) (Washington, DC: USITC), https://www.usitc.gov/publications/332/pub4889.pdf.
4 U.S. International Trade Commission, USMCA Automotive Rules of Origin: Economic Impact and Operation, 2025 Report (Publication No. 5642, Investigation No. 332-600, July 2025, corrected August 2025) (Washington, DC: USITC), https://www.usitc.gov/publications/332/pub5642.pdf.
5 U.S. Customs and Border Protection, “Official CBP Statement on Tariffs,” March 8, 2025, https://www.cbp.gov/newsroom/announcements/official-cbp-statement-tariffs.
6 “EU-Mercosur Deal: Latin America Commission Trade Deal Brazil Uruguay,” Politico Europe, October 27, 2025, https://www.politico.eu/article/eu-mercosur-deal-latin-america-commission-trade-deal-brazil-uruguay/; The Associated Press, “China and ASEAN Sign Expanded Free Trade Pact,” AP News, August 3, 2023 https://apnews.com/article/asean-china-free-trade-trump-8a9d0f1ed5e87ebba4b5798275cd3605; and Department for Business and Trade and Department for International Trade, “The UK and the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP),” GOV.UK, published March 31, 2023 (last updated 1 August 2025), https://www.gov.uk/government/collections/the-uk-and-the-comprehensive-and-progressive-agreement-for-trans-pacific-partnershipcptpp.