The Importance of the US-Mexico-Canada Agreement for Oregon

1Why USMCA Matters for Oregon

The United States–Mexico–Canada Agreement (USMCA) underpins Oregon’s trade relationships with its two largest regional partners. Together, Canada and Mexico account for approximately one-fourth of Oregon’s goods exports and one-six of its goods imports, and purchase well over a billion dollars of Oregon services exports. In total, trade with Canada and Mexico supports about 170,000 Oregon jobs.

WCIT championed USMCA as the successor to the North American Free Trade Agreement (NAFTA) because of its improvements it made, while ensuring continued tariff-free access for exporters and stabile supply chains for importers. More recently, USMCA has significantly mitigated the impact of new federal tariff actions. As the statutory 6-year USMCA review begins, WCIT’s top priority is the continuation of the USMCA and to ensure we “do no harm” to the integrated supply chains that have grown over the past 33 years of North American partnership.

2Exports to Canada & Mexico

The USMCA remains vital for keeping Oregon exporters connected to Canadian and Mexican markets. From April 2025 to March 2026, 24% of Oregon’s total goods exports went to these two partners. Businesses exported $2.3 billion in goods to Canada (8% of total exports) and $4.3 billion to Mexico (15%). Compared to the year ending in March 2025, exports to Canada and Mexico were both down 28%. These declines highlight the risks to Oregon exporters create by trade tensions, including the uncertainty surrounding new tariffs and potential USMCA renegotiation.

Figure 1. Oregon goods exports to Canada and Mexico (rolling 12 months, Dec. 2020–Mar. 2026).

From April 2025 to March 2026, top goods exports to Canada included fresh and dried nuts, non-crude oil, builders’ joinery, civilian aircraft and parts, and asphalt products. Among top exports, civilian aerospace products saw the strongest export gains, followed by fresh and dried nuts. However, many previously top exports saw significant export declines. Trucks and tractors were the top two Oregon exports to Canada in the year ending in March 2025, yet exports of each declined by nearly 90% in the last year – allowing exports like asphalt products to move into the top five despite a decline in value.

Leading goods exports to Mexico were auto parts, engines, tires, metal fixtures and hardware, and railway cars. All the leading exports experienced notable declines compared to the previous year. Of all the top exports, engines and railway cars exports experienced the sharpest decrease. Compared to the year ending March 2025, engine exports declined from $945 million to $353 million (-63%), while railway car exports fell from $164 million to $74 million (-55%).

Top Exports to Mexico by Value

Some products are especially reliant on Canadian and Mexican markets. Between April 2025 and March 2026, Oregon exported $4.4 billion worth of goods for which at least 90% of total exports went to Canada and Mexico. These highly dependent exports include auto parts, engines, tires, metal fixtures & hardware, and non-crude oil. They also underscore the risk of creating trade policy uncertainty, such as imposing new tariffs (e.g., autos) on North American supply chains or suggesting that USMCA may not be continued. When engine and auto parts exports to Mexico declined by over $1 billion in the most recent year, there were no established markets to pick up that slack. Oregon’s total exports simply fell.

Oregon also relies on Canada and Mexico for services exports. In 2024, services trade to these partners totaled $1.4 billion, led by personal travel, business travel, advertising services, industrial processes and repair & maintenance services.

3Imports & Tariff Protection

The USMCA is equally critical for imports. While theoretically enabling tariff-free access from Canada and Mexico, tariff costs have spiked since early 2025. From April 2025 to March 2026, Oregon imported $3.4 billion in goods from Canada (11% of total imports of imports from the world) and $831 million in goods from Mexico (3%). Of all imports from Canada and Mexico, an estimated $3.3 billion (78%) claimed USMCA. USMCA claims on these imports led to estimated direct tariff savings of about $53 million, though they are offset by $88 million in estimated Section 232 tariff payments on USMCA-claiming imports.

USMCA’s indirect benefits were even more significant following the imposition of tariffs of up to 25% on Mexico and 35% on Canada for imports that did not comply with USMCA rules. As clearly shown in the graph below, USMCA-claiming imports rose sharply even as total imports declined.

Figure 2. Oregon goods imports from Canada and Mexico — USMCA-claiming vs. non-claiming — with average tariff rate (Jan. 2020–Mar. 2026).

Much of the new claims can be attributed to products that previously faced no tariffs (e.g., fertilizers, computers, or wood veneers) regardless of the country of origin. While tariff reductions historically did not justify the compliance costs of claiming benefits, avoiding the IEEPA tariffs made it worthwhile. Despite the carveout for USMCA-compliant imports, Oregon businesses paid an estimated $25 million in extra IEEPA tariffs on imports from Canada and Mexico in the 12 months ending in March 2026.

While the IEEPA tariffs were struck down, high USMCA claim rates could continue if the exemptions for USMCA-claiming imports are extended to future tariffs. IEEPA was immediately replaced by 10% Section 122 tariffs. The IEEPA tariff exemptions, such as for USMCA-eligible goods, were continued. The lower Section 122 rates and high USMCA-claim rates limited Section 122 costs to an estimated $893,000 in March 2026.

Imports subject to Section 232 tariffs have not been so fortunate and remain fully subject to higher tariff rates, regardless of whether they meet USMCA rules. In total, Oregon businesses paid $81 million in additional tariffs on steel and aluminum, $4 million on autos and auto parts, $3 million on timber and lumber, as well as lower levels of new tariffs on products such as copper and trucks between April 2025 and March 2026.

Pending Section 232 investigations threaten tariffs on billions more in imports, including $1.4 billion in Oregon imports on the critical minerals 232 list and $255 million in imports on the semiconductors 232 list.

Imports from Canada and Mexico also could be affected by new Section 301 investigations into structural excess capacity and enforcement of forced labor prohibitions, though for now it seems likely that any new Section 301 tariffs would include a carveout for USMCA-compliant goods.

From April 2025 to March 2026, top goods imports from Canada included fertilizers, non-crude oil, wood veneer, bovine meat and particle board. As the table shows, these top imports remain subject to very low tariffs. Steel and aluminum drive much of the tariff costs, but there are some unexpected examples – such as $3 million in extra tariffs on medical furniture – contributing to the tariff increases.

Leading goods imports from Mexico included computers, wires, medical furniture, tractors, and electronic switches, from April 2025 to March 2026. Unlike Oregon’s top imports from Canada, the leading products from Mexico have seen tariff spikes. Wires, tractors, and electrical switches all saw large tariff increases despite significant import declines. Medical furniture again drives the tariff increases, with tariffs jumping nearly tenfold despite virtually unchanged import values.

Certain products are sourced almost exclusively from these partners. Between April 2025 and March 2026, Oregon imported $440 million worth of goods for which Canada or Mexico was the only supplier.

Key imports into Oregon where Canada accounts for all or virtually all imports from the world include fertilizers; bovine meat; alloy steel ingots; semifinished, nonalloy steel products, and rapeseed oil. The fertilizers and agricultural products largely have avoided new tariffs because of the USMCA carveouts, but eliminating those exemptions from future tariffs – or the termination of USMCA itself – would have an immediate negative impact on companies relying on those Canadian products.

Oregon is also dependent on imports of medical furniture, tractors, liquor and spirits, parts for electrical switches, and citrus fruits from Mexico. However, the value of these imports or the share coming from Mexico – and therefore the potential risks associated with future tariffs – tend to be lower.