New Study finds staggering job losses from a NAFTA Withdrawl

October 17th, 2017

A new economic analysis from Impact Econ has found that leaving NAFTA would eliminate between 256,000 and 1.2 million American jobs over the next 3-5 years, mostly in retail, agriculture, and vehicle manufacturing. The study, Reversing NAFTA: A Supply Chain Perspective, examined how tariffs on imports and exports would likely rise in all three countries in the case of an American exit from the trade pact and found net job losses in each scenario.

It found that new tariffs would cripple well-established supply chains, especially in auto manufacturing and would lower trade and gross domestic product levels for all three countries.

Though the study did find some gains to American heavy manufacturing, these 95,000 new jobs were severely overshadowed by the million plus job losses across a broad swath of industries. This is especially true in scenarios where Mexico and Canada responded to U.S. tariffs with tariffs of their own, an extremely likely situation under World Trade Organization rules.

The study also found that without NAFTA, the U.S. would import more of its goods from countries other than Canada and Mexico, especially as well-established production chains shift overseas. That means exporting powerhouses like China could see a windfall in the long term.