If the NAFTA update is passed and subsequently ratified by all three countries involved, experts aren’t sure how any additional revenue or savings will be used to pay for a wall.
“I expect essentially zero change in revenue collected from tariffs arising through the USMCA,” Chad Bown, senior fellow at the Peterson Institute for International Economics, told CNBC in December. “Under both the existing NAFTA and President Trump’s proposed new deal, the United States charges zero tariffs on trade with Canada and Mexico.”
Mexico’s former chief NAFTA negotiator, Kenneth Smith Ramos, said that nothing in the USMCA would redirect money toward a wall.
Lori Wallach, director of Public Citizen’s Global Trade Watch, told PolitiFact: “I do not see any scenario under which the U.S. government gets more money from Mexico per se.”
“Even if the U.S. tariffs had been raised, that would be paid by Mexican importers, not the Mexican government,” she added.
The White House and the office of U.S. Trade Representative Robert Lighthizer have not responded to CNBC’s requests to explain how the USMCA is expected to fund the wall.