USMCA Would Increase Tariff Revenue, CBO Estimates
The enactment of the U.S.-Mexico-Canada Agreement would increase revenues by $230 million a year in 2023 and $360 million a year in 2024, the Congressional Budget Office estimates. CBO projects that “certain imports of motor vehicles and parts” that currently…
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enter the U.S. duty free under NAFTA would not be eligible under the stricter rules of origin in USMCA. It expects that some of those parts or vehicles would be replaced by domestic production, but some would be replaced by imports subject to tariffs, and thus, total customs revenue would rise. While there would be hundreds of millions spent in the first three years, primarily for monitoring environmental and labor compliance in Mexico, by 2024, that spending would be just $21 million, and would be partially offset by lower subsidies to dairy farmers, since CBO assumes they would have higher sales as a result of the deal.