When the United States-Mexico-Canada Agreement (USMCA) replaced NAFTA in 2020, it did more than modernize a landmark yet outdated agreement. It established the framework for more than $1.8 trillion in annual trade across North America as recently as 2024. That trade supports millions of jobs in the United States, thousands of them here in Arizona. Now, as the 2026 renewal decision approaches, the certainty provided by USMCA is on the line.

For Arizona, the stakes could not be higher. Mexico is our No. 1 trading partner and Canada is No. 2. From aerospace and electronics to copper, mining products, citrus and lettuce, nearly a third of Arizona’s total exports head to those two markets. In 2024 alone, Arizona exported about $9 billion in goods to Mexico and another $3 billion to Canada. These flows of trade represent paychecks for U.S. workers, revenue for businesses and opportunities for communities statewide.

Anyone watching the trucks line up at the Nogales-Mariposa Port of Entry knows how deeply our economy depends on cross-border commerce. The winter produce that fills U.S. grocery store shelves often comes through Nogales, while Arizona’s manufacturers export the parts and equipment used in everything from automobiles to jet engines. In Tucson, aerospace companies rely on supply chains that stretch across the border. In the East Valley, technology startups depend on USMCA’s digital trade provisions to keep their products moving efficiently. Without the agreement, many of these goods would face tariffs, delays or unpredictable rules that would harm competitiveness.

The agreement also provides something less visible but equally important: predictability. More than 7,000 Arizona companies exported goods in 2024, with the overwhelming majority small or mid-sized firms. These are not multinational giants backed by teams of lawyers and trade experts. They are local entrepreneurs who depend on USMCA to keep rules clear and markets open. Their ability to hire, expand and invest depends on certainty.

The public comment period on USMCA renewal is now open. Until Nov. 1, individuals, companies and organizations can submit their views to U.S. Trade Representative Jamieson Greer. There will also be a public hearing on Nov. 17 in Washington, D.C. Arizona voices need to be heard. Policymakers want to know how trade agreements affect real communities. Whether your business relies on exporting to Mexico or Canada, your farm depends on tariff protections or your workers benefit from integrated supply chains, you must share your story now. 

Should the agreement unravel, Arizona would feel the shock first. Tariffs would rise, supply chains would fray and investment could shift elsewhere. The consequences would be fewer jobs, higher prices and slower growth. Preserving USMCA is not about politics. It is about protecting the backbone of Arizona’s economy and ensuring that families from Nogales to Phoenix to Flagstaff continue to benefit from strong cross-border ties.

At the national level, USMCA remains one of the few trade agreements that reflects the realities of today’s economy. It covers digital trade, labor protections and sustainable practices. It is a model for how trade can support good jobs, environmental responsibility and shared prosperity. USMCA is more than a treaty on paper. It is the system that powers businesses, supports jobs, strengthens supply chains and connects communities across North America. Weakening it would not only harm Arizona but also the entire United States.

Arizona’s future depends on certainty, not disruption. As the renewal decision approaches, our voices must be clear. We should continue to build on USMCA, not dismantle it.

Steven Zylstra is president and CEO of the Arizona Technology Council & SciTech Institute. 

Carol Colombo is managing member of Fedelta Partners and the AzDEC chairwoman.

The post USMCA renewal is critical to Arizona and the nation first appeared on Arizona Capitol Times.

Key Points:

• U.S. imposes 17.09% tariff on Mexican tomatoes

• Tariff could increase prices by 10% or more

• Sen. Ruben Gallego estimates tomato prices could rise 50%

Those tomatoes used in everything from your salads to salsa are going to get more expensive.

And really soon.

The U.S. Department of Commerce on Monday imposed an immediate 17.09% tariff on tomatoes imported into this country from Mexico. And given most of the tomatoes sold in Arizona — and, for that matter, in the United States — come from Mexico, estimates are the new charge could add 10% to prices.

Or more: Sen. Ruben Gallego, in his own plea to Commerce Secretary Howard Lutnick asking him not to impose the tariffs, cited a study suggesting that tomato prices could rise an average of 50%.

None of that convinced the secretary.

“For far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes,” he said in a prepared statement. “That ends today.”

The move ends what is known as the “Tomato Suspension Agreement,” first instituted in 1996, where the federal agency agreed not to impose tariffs on tomatoes from Mexico if they were not sold below a certain “reference price.” Essentially, a floor on what’s paid to the farmer or grower, it runs from 31 cents to 83 cents a pound, depending on the time of year, the kind of tomato, whether it is grown in a controlled environment, and whether it is organic or not.

The agreements, last updated in 2019, also have requirements for inspection at the border.

In April, responding to complaints led by the Florida Tomato Exchange, the Commerce Department concluded that Mexican companies were selling tomatoes in the United States at prices below what it costs to produce or below prices in their home markets. That led the agency to announce it was terminating the agreement.

And that, in turn, paved the way for the Commerce Department to impose what it calls an “anti-dumping” duty.

The concept is not unique. According to the agency, it currently has 768 anti-dumping and countervailing duty orders, “which provide relief to American companies and industries impacted by unfair trade.”

On July 14, Gov. Katie Hobbs blamed the price hike on the president.

“Donald Trump’s reckless trade war is raising prices, threatening our economic growth and killing jobs,” she said in a prepared statement. “He is threatening to kill over 50,000 jobs between Arizona and Texas and forcing Arizonans to pay more at the grocery store, all to benefit Florida farmers.”

According to a study by Texas A&M University, the tomato import trade directly and indirectly supports 50,000 jobs in the two states, totaling $8.3 billion in economic impact.

Hobbs, however, did not address the findings by the Commerce Department that Mexican farmers were using “unfair trade practices,” to give them a financial advantage over domestic producers. Instead, press aide Christian Slater said she is focused solely on what all this means here.

“She gives a damn about Arizonans losing their jobs and paying more for tomatoes at the grocery store,” he said.

But Robert Guenter, executive vice president of the Florida Tomato Exchange, said that ending the suspension agreements was long overdue.

“For more than three decades, five consecutive agreements have failed to stop the illegal dumping of unfairly priced tomatoes into the U.S. market from Mexican producers,” he said in prepared comments. “This dumping has devastated the U.S. tomato industry: More than 60% of U.S. tomato growers have gone out of business since 2000, and the U.S. market share has dropped from 80% to 30% during that time.”

Three members of Arizona’s congressional delegation, however, have their own theory about why all that is occurring. They contend that if domestic growers are losing a share of the market, some of it could be their own fault.

“While some segments of the North American tomato supply chain have innovated to meet evolving consumer preferences, others have not,” wrote Sen. Mark Kelly and Rep. Greg Stanton, both Democrats, and Republican Rep. David Schweikert in their own letter in May to Lutnick in opposition to the tariff plan. “It is clear to us that imported tomatoes are not the root cause of the challenges that some portions of our domestic industry face.”

Kelly doubled down on that Monday.

“Terminating this agreement won’t solve the problems facing Arizona growers,” he said in a prepared statement. And the senator also said that the administration “has not found any violations” despite Lutnick’s findings of unfair trade practices.

Lutnick, in Monday’s statement, defended the move.

“This rule change is in line with President Trump’s trade policies and approach with Mexico,” he said.

Hobbs, in her press release, attached statements from others also opposed to the new tariffs.

“This decision will damage trade imports and have severe consequences for Nogales in revenue, employment and trade,” said Mayor Jorge Maldonado.

“The policy will shift costs to Arizona small businesses, restaurants and grocers, which will raise prices, slow hiring and threaten livelihoods,” said Kimber Lanning, chief executive of Local First Arizona.

And Todd Sanders, president and CEO of the Greater Phoenix Chamber of Commerce, called the now-scrapped agreement “a model of fair trade, balancing access to Mexico’s ideal growing conditions with protections for U.S. growers and consumers.”

The issue of free trade and tariff-free tomatoes has been a bipartisan effort in Arizona for years.

In 2019, then-Gov. Doug Ducey wrote to Wilbur Ross, who then headed the Department of Commerce,  urging him not to scrap the suspension agreement. The focus of the Republican governor, at least in part, was the economic impact on border communities which are integral to the importation process.

“Border communities are essential to our nation’s trade with Mexico and efforts focused on promoting investment and job creation in these areas are vital,” Ducey wrote.

That did result in the Commerce Department, under the first Trump administration, extending the agreement — until now.

Last year, Hobbs added her voice when extension of the contract was under the purview of Commerce Secretary Gina Raimondo, an appointee of President Biden. She, along with Sonora Gov. Alfonso Durazo, urged Raimondo to “reject any attempt to terminate this vital agreement and instead renew it for another five years.”

In the end, though, the agency, now back under Trump, concluded an extension made no sense.

The Arizona Farm Bureau, for its part, is taking no official position about the decision by the Department of Commerce to end the suspension agreement. It has members who grow tomatoes not only in Arizona but also in Mexico.

But Julie Murphree, a spokeswoman for the organization, said it is concerning.

“We do like to point out that Mexico is our largest trading partner,” she said, saying her organization had hoped there could be a new agreement.

Murphree also said this isn’t about competition with Arizona operations which tend to grow specialty tomatoes in greenhouses.

“Our production would barely put a dent in relieving any of the demand,” she said.

Other states, however, have a different perspective. And it’s not just Florida.

Dan Wright, president of the Arkansas Farm Bureau, sent his own letter to Lutnick supporting the end of the suspension agreement, calling it a “critical step toward re-establishing a fair market for American farmers.”

The post Trump’s trade policies spark tomato tariff battle in Arizona first appeared on Arizona Capitol Times.

During the pandemic, Americans learned how painful supply chain disruptions can be. Now, a newly proposed action from the Trump administration could unintentionally make the pandemic’s supply chain disruptions seem tame. 

President Trump is looking to rapidly rebuild American shipbuilding. That’s an important goal since the erosion of U.S. shipbuilding — and China’s growing dominance in global shipbuilding — must be confronted. But the administration’s proposed plan could send costs soaring for U.S. consumers, grind U.S. exports to a halt, wreak havoc at U.S. ports, and completely undermine the president’s own energy and trade agendas. 

The problem rests in a plan authored by the U.S. Trade Representative (USTR) to charge exorbitant port fees — in some cases $1.5 million dollars — for every incoming vessel that’s part of a fleet with even one Chinese-built ship.  

The proposal is intended to encourage the use of U.S.-built vessels. Unfortunately, for goods being shipped today, there simply isn’t a shipping fleet in the world that won’t be hit by the port fees. According to shipping analysts, Chinese-built container vessels comprised 81% of the global market in 2024. For bulk carriers, Chinese ships represent 75% of the global fleet. 

Although Chinese control of shipping and shipbuilding absolutely demand a response, the proposed fee will hurt domestic U.S. industries more than China. Since there’s currently no way to avoid the fees, U.S. importers and exporters are going to be walloped by punishing costs. 

While the ultimate goal is to resurrect domestic U.S. shipbuilding, our current shipbuilding capacity has atrophied to the point where bringing it back could take decades. In other words, there aren’t U.S. made shipping vessels to charter right now — and there won’t be for some time.

If the administration’s plan is implemented in the coming weeks as planned, the impact will be immediate — a major case study in unintended consequences. 

A wide range of U.S. industries have submitted comments to the USTR painting a remarkably grim picture. 

Shippers are warning the proposed fees would reach tens of billions of dollars for their industry, and those costs will be passed on to U.S. consumers. Shippers will also turn to large vessels to reduce their number of port calls, creating congestion at major ports and dealing a devastating blow to secondary U.S. ports. 

The Association of Ship Brokers & Agents told USTR, “If the maximum fees are imposed, the resulting economic pain will reverberate through every sector of the U.S. economy and in every household.”

The president has said that he wants to help America’s farmers and energy producers grow their overseas markets. But they’ll likely be some of the hardest hit. In fact, the oil and gas industry warned the plan could “undermine President Trump’s ‘energy dominance’ agenda,” by making it uncompetitive to export U.S. energy. 

Similarly, America’s mining sector warned, “increased costs, supply chain disruptions and even the outright inability to import or export critical materials could bring the industry to a standstill.”

And echoing concerns from other farmers, the American Soybean Association warned, “U.S. soybeans will be effectively shut out from our global export markets.”

Rebuilding American shipbuilding is urgently important. But it must be done without clobbering America’s consumers and bringing U.S. exports to a standstill. Common sense needs to prevail.

The post A Looming Port and Trade Catastrophe first appeared on Arizona Capitol Times.

The United States-Mexico-Canada Agreement (USMCA) is far more than just a trade pact. It is a framework for economic cooperation, designed not only to increase trade, create jobs, and foster cross-border investment, but to build enduring relationships between three of the world’s largest economies. A key to the USMCA’s success lies in its application of interdependence. This model reveals how repeated interactions and cooperation over time can build trust, mitigate the risks of short-term self-interest, and ultimately create a system of mutual benefit.

The concept of interdependence in negotiations highlights how the choices of each party can significantly impact the outcomes for all involved. When faced with a single negotiation, the focus may naturally fall on immediate gains, potentially leading to less-than-ideal results for everyone. However, when these negotiations are ongoing and repeated, a different dynamic emerges. Recognizing the value of continued interactions, countries are incentivized to prioritize cooperation and seek mutually beneficial solutions, leading to sustained and mutually advantageous outcomes. This understanding of interdependence is central to the USMCA and the framework’s success.

In practice, applying this understanding of interdependence within the USMCA means recognizing the long-term stakes of these relationships and prioritizing cooperation over short-term gains. For instance, Mexico’s agreement to raise labor standards was reciprocated by the U.S. ensuring continued agricultural market access. This cycle of mutual concessions creates a stable and predictable environment for both nations. With $700 billion in annual trade between the U.S. and Mexico and over $600 billion in trade with Canada (U.S. Census Bureau, 2023), this trust-based collaboration strengthens the economic foundation of North America.

This approach, which emphasizes interdependence in negotiations, not only addresses current trade issues but allows for the flexibility to adjust priorities over time. Canada, for example, values continued access to U.S. markets for dairy and timber, while Mexico focuses on infrastructure and labor reforms. The U.S., in turn, seeks protection of intellectual property and reducing trade imbalances. The $112 billion U.S. trade deficit with Mexico in 2022 (U.S. Census Bureau, 2023) underscores the necessity of ongoing negotiations to address imbalances and ensure fairness. By engaging in repeated negotiations and adjusting priorities incrementally, all three countries ensure the durability of their trade relationships.

The impact of the USMCA has been significant. The agreement has already created more than 76,000 new jobs in the U.S., expanding opportunities in agriculture, digital trade, and intellectual property protection (U.S. International Trade Commission, 2023). The combined $1.7 trillion in annual trade between the U.S., Mexico, and Canada underscores the deep interdependence that has been built through years of reciprocal cooperation and mutual trust.

However, the success of this framework faces external challenges. The rise of BRICS (Brazil, Russia, India, China, and South Africa) as a growing economic bloc is reshaping the global trade landscape. Together, BRICS countries represent 24% of global GDP and over 40% of the world’s population (Statista, 2023), and their growing influence presents a real challenge to North American dominance. The Belt and Road Initiative launched by China, projected to cost $8 trillion by 2049 (China Daily, 2023), shows how new trade routes and partnerships could shift global economic power.

To counter these challenges, the U.S., Mexico, and Canada must remain united under the USMCA, ensuring that their cooperation continues to evolve. Mexico is the largest market for U.S. agricultural exports, valued at over $20 billion annually (U.S. Department of Agriculture, 2023), and the U.S. benefits from continued access to $3.5 billion worth of Canadian dairy products each year (U.S. Department of Agriculture, 2023). These reciprocal trade arrangements are the direct result of the iterative, trust-based negotiations supported by the USMCA.

Another critical success of the USMCA is its protection of intellectual property, which has already generated $2.8 billion in additional revenue for U.S. companies (U.S. International Trade Commission, 2023).

The evolving global economic landscape, particularly the rise of China, underscores the need for continued strategic cooperation under the USMCA. The $1.7 trillion in annual trade between the U.S., Canada, and Mexico is a testament to how trust, iterative cooperation, and long-term thinking can ensure continued prosperity in the face of external pressures.

Julio Espinoza is an international trade analyst with Molera Alvarez LLC.

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