MEXICO sells America more goods than America sells Mexico, and it enrages President Donald Trump. In 2015 the difference was $58 billion (0.3% of GDP). That is enough, thinks Mr Trump, to justify rewriting the North American Free-Trade Agreement (NAFTA), which allows goods to flow across the Rio Grande free of tariffs. Yet the trade deficit masks bigger figures: America sends almost $240bn in goods to Mexico every year. Were NAFTA to disappear in a renegotiation-gone-wrong, many Americans would pay a price—and not just as consumers faced with dearer avocados. Which American producers would suffer?
Suppose, optimistically, that each side followed World Trade Organisation (WTO) rules. Then, tariffs would revert to so-called “most favoured nation” rates. (That might sound vaguely friendly, but it simply means neither side can offer a different deal from what it gives to any other WTO member.) By matching these tariffs to trade flows for about 5,000 goods, The Economist has estimated which states’ exporters would be worst-affected by the levies.
Farm states face the highest charges....Continue reading
Source: United States http://ift.tt/2jZRnnK
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