Texas Businesses Teeter on Edge as US-Mexico-Canada Trade Agreement Hangs in Balance

The US-Mexico-Canada trade agreement (USMCA) is crucial to Texas' economy, which relies heavily on trade with its southern and northern neighbors. Mexico and Canada are Texas' top two trading partners, accounting for a combined $281.2 billion in bilateral trade in 2024.

Air Tractor, Inc., a North Texas company that manufactures aircraft, is just one example of how USMCA affects businesses. President Jim Hirsch stated that without the agreement, his company would face a 12% price increase on Canadian engines used in its planes.

According to Tony Payan, director of Rice University's Claudio X. Gonzalez Center for the U.S. and Mexico, Trump is likely seeking maximum leverage rather than terminating USMCA. Even if Trump announced termination, the agreement would remain in effect for another 10 years.