Global Trade Alert
Global Trade Alert

Canada and Mexico have retaliation options that shrink American take-home pay

cBrief 5: “These Are Your People”

Trade conflict is costly to all parties. Canadian and Mexican trade retaliation can deny tariff-related wins for American workers. Blunt retaliation could go so far as to eliminate all the take-home pay gains in 40 U.S. states and make whatever gains occur elsewhere barely noticeable. Tariff-induced higher prices are a further drag on American families. Canada and Mexico would take a strong hit from blunt retaliation, but they can use smarter approaches and demonstrate the limits of America First Trade Policy for U.S. workers.

Authors

Simon Evenett, Marc-Andreas Muendler

Date Published

03 Mar 2025

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