A new study from Purdue University reveals that the United States-Mexico-Canada Agreement (USMCA) has contributed significantly to lowering food costs for American households while enhancing the efficiency of the regional agricultural supply chain. These findings are drawing considerable attention as the agreement prepares to enter a critical review phase in 2026.
North American Trade and Food Costs
Study on Household Food Costs
Research conducted by Purdue University indicates that North American trade agreements, currently maintained through the USMCA, have saved U.S. households approximately $700 per year on food spending, representing roughly 7% of their total food budget. This result reflects the increasingly vital role of agricultural trade in curbing the cost of living and securing a stable food supply. According to the research team's data, for every 1% reduction in tariffs on food products, consumer food prices tend to decrease by an average of 2.8% over a 10-year period. Conversely, if preferential trade terms under the USMCA are not maintained, tariffs could rise by an average of 7.4%, wiping out much of the price advantages consumers currently enjoy.
For the agricultural sector, the USMCA not only facilitates the seamless movement of goods but also bolsters cross-border supply chain efficiency. Key agricultural commodities such as corn, wheat, soybeans, pork, and beef trade more smoothly among the United States, Mexico, and Canada, helping maintain consistent supplies and alleviating market price pressures. The report also highlights that low-income households benefit the most from keeping food prices reasonable, as food accounts for a substantial share of their living expenses. Meanwhile, agricultural producers gain from broader market access and closely integrated logistical systems across North America.
Having entered into force in 2020, the USMCA is now approaching its joint review process. Discussions among the United States, Mexico, and Canada are expected to focus on multiple sectors, including agriculture and food trade. Experts emphasize that maintaining a stable trade environment remains crucial for both consumers and regional agricultural producers. Amid widespread global concern over food inflation, the findings from Purdue University demonstrate that agricultural trade agreements not only drive exports, but also play a critical part in stabilizing prices, securing supplies, and strengthening the resilience of food supply chains against global economic volatility.
Source: VOAA
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