As grocery costs continue to strain household budgets, researchers found that tariff reductions under North American trade agreements have generated significant savings for consumers. A new study from Purdue University suggests free trade with Canada and Mexico has helped keep food prices lower for American families.
The study, released today, estimates that trade agreements between the U.S., Canada, and Mexico have lowered food costs by roughly $700 per household annually in today’s dollars. That’s about seven percent of the average family’s total food spending.
According to Bernhard Dalheimer, Assistant Professor and co-author of the Purdue study, “This study looked at the consumer side effects precisely. We got a lot of food imports from Mexico. And also we export a lot of food to Mexico and Canada as well. These trade relationships help keep consumer prices lower.”
The findings come as policymakers prepare for the upcoming review of the United States-Mexico-Canada Agreement, or USMCA, which took effect in 2020.
Dalheimer says the results highlight the important role North American trade plays in maintaining affordable food supplies for U.S. consumers. “Whenever we talk about trade agreements, we think about producers, which is also, the main motivation for them. But we should not forget, if we focus on only one group that is affected by the strait agreements, say manufacturing producers, there’s economy wide effect on other sectors as well. And this one in particular concerns food, which affects everyone. And it does not only affect everyone, but it also affects those who are on the lower income end.”
With food inflation remaining a concern for many families, the study adds a new perspective to the debate over the future of international trade and its impact on kitchen-table economics.
Download the full study here
