Study: Withdrawal From NAFTA Would Cost U.S. 1.8M Jobs

WASHINGTON – A study commissioned by Trade Partnership Worldwide LLC for Business Roundtable finds that should the United States pull out of the North American Free Trade Agreement, or NAFTA, it could lead to the elimination of 1.8 million American jobs the first year, including more than 64,000 jobs in Ohio.

The 36-page analysis shows that U.S. exports to Canada and Mexico would fall by 17.4% and would lower overall worldwide exports from U.S. companies by 2.5%, citing higher tariffs that would make American companies less competitive in the global market.

“Terminating NAFTA would permanently reduce U.S. employment, exports, and economic output, while benefiting our economic competitors at the expense of American workers and businesses,” said Joshua Bolten, president and CEO of Business Roundtable. “We urge the administration to take into account the potential damage of withdrawing from NAFTA, and to focus instead on modernizing the agreement so that it remains a cornerstone of American prosperity.”

President Donald Trump – a vocal critic of the trade agreement – has threatened to either re-negotiate its terms or abandon NAFTA. In recent weeks, the administration has slapped tariffs on products such as washing machines manufactured in China and solar panels made overseas and shipped to the U.S. under Korean brands such as Samsung and LG.

Export business from Ohio companies to NAFTA partners Canada and Mexico would drop 18%, the analysis said, while overall production output would decline by $4 billion, the study concluded.

Pulling out of NAFTA could cost Ohio 64,300 jobs the first year, the report noted.

The projections are based on higher tariffs enacted by Canada and Mexico against U.S. imports in the aftermath of a U.S. withdrawal from the agreement, the analysis clarified.

Business between Ohio companies and Canada and Mexico would drop by $4.9 billion, the study found. The analysis determined that Ohio would lose $3.7 billion in exports to Canada and $1.2 billion worth of exports to Mexico.

Among the more vulnerable industries in Ohio are auto parts shipments, which stand to lose $1.143 billion in export business, according to the report. Motor vehicle exports would decline by $728 million, motor vehicle body and trailer business would drop by $259 million, and tobacco products would decline $196 million, the study found.

Exports of general-purpose machinery and cleaning agents are expected to fall by $112 million and $111 million respectively should the U.S. end its participation in NAFTA.

Sales of passenger vehicles from Ohio to Canada, for example, would fall $567 million the first year, given a higher tariff rate of 6%, the study showed. Ohio exports $2.2 billion worth of passenger vehicles to Canada each year.

Shipments of motor vehicle body components to Mexico would suffer by $72 million when a 5% tariff is applied, while exports of hand sanitizers to Canada would fall by $38 million under a 7% tariff, according to the study.

The full study can be accessed here.

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