Ways and Means backs U.S. tariff strategy, seeks USMCA changes

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Ways & Means backs US tariffs, seeks USMCA change

Highlights

The House Committee on Ways and Means reports over $1 trillion in new U.S. investment commitments and 18+ trade agreements since Trump returned, supporting jobs and supply chains.
Recent tariff reductions include EU cutting vehicle duties to zero from 10%, UK removing its 20% beef tariff, and Taiwan eliminating tariffs on most U.S. vehicles and 94% of agricultural products.
U.S. exports hit a record $3.4 trillion last year, the goods trade deficit with China dropped 32% to its lowest since 2004, and Smith urges changes to USMCA to address manufacturing cost disparities favoring Mexico and Canada.

Trade gains cited ahead of review

As stated by House Committee on Ways and Means, Smith tells the hearing that the administration’s America First trade policy is producing new market openings, lower foreign tariffs on U.S. goods and more than $1 trillion in investment commitments to the United States. He says the administration has signed more than 18 trade agreements and frameworks since Trump returned to office, with benefits for jobs, industrial capacity and supply chains.

Smith highlights tariff changes affecting manufacturing, including the European Union’s move to cut tariffs on U.S. vehicles to zero from 10%, Cambodia’s removal of tariffs on U.S. imports, Taiwan’s plan to eliminate tariffs on most vehicles and Malaysia’s preferential tariff rates for many U.S. products. He also points to agriculture measures such as Australia opening to U.S. beef, Japan’s planned $8 billion in U.S. farm purchases, Taiwan’s tariff elimination on 94% of U.S. agricultural products and the UK’s removal of its 20% tariff on U.S. beef.

He says these steps are contributing to a projected 43% reduction in the agricultural trade deficit inherited from the Biden administration. Smith also says U.S. exports reached a record $3.4 trillion last year, while the U.S. goods trade deficit with China fell 32% to its lowest level since 2004 and China’s share of total U.S. imports dropped to 9.3% from 13.4% in one year.

Manufacturing concerns and AGOA priorities

Smith argues that manufacturing remains a weak point because current USMCA rules can encourage companies to place facilities in Mexico rather than the United States. He says several CEOs have recently told him that firms can import more components tariff-free into Mexico under the agreement and then ship finished goods into the U.S. without tariffs, creating a cost advantage for Mexico and Canada that should be addressed.

With the July 1 Joint Review deadline approaching, Smith says lawmakers need to examine changes required to preserve the agreement’s benefits while closing loopholes. He adds that enforcement remains an issue, citing Mexico’s past blocking of U.S. corn imports and the unresolved dispute over Canadian dairy market access for American producers.

Smith also says he supports continued use of Section 122 tariffs while Section 301 and Section 232 investigations proceed, and he calls for strict enforcement of commitments made under newer trade agreements. Beyond North America, he identifies long-term renewal of the African Growth and Opportunity Act as another priority, saying AGOA supports U.S. supply chains and helps counter the influence of China and Russia in fast-growing African markets.

In our earlier report on North American cross-border freight trends, we noted that total U.S. trade with Canada and Mexico edged down to $130.8 billion in February 2026, as a sharp decline in Canada-linked freight outweighed continued growth with Mexico. The update also highlighted that trucking remained the dominant transport mode, while air freight jumped strongly—signals of shifting patterns that matter for supply chains and corridor planning tied to U.S. trade agreements.

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