According to the study, retail carries $182 billion worth of products from NAFTA partners. Without NAFTA, tariffs would increase the cost of these products by $5.3 billion annually. These tariffs and impacts to revenue from loss of consumer purchasing power would reduce retailers’ bottom lines by up to $15.8 billion each year. The effects could extend to employment and could lead to the loss of 128,000 retail and retail-supported jobs within the next three years.
At the current rate of trade, food and beverage would be the most affected by a withdrawal, with $2.7 billion in increased costs. The U.S. food and beverage retail sector had sales of $719 billion and generated total operating profits of $20 billion last year, with an operating margin of 2.8 percent. The category paid $5 billion in taxes on the profits, for an effective tax rate of 25 percent. New tariffs that would arise without NAFTA would cost an additional $2.7 billion, equaling an increase in the effective tax rate of 10 percent, from 25 percent to 35 percent.
For example, the United States consumes 20 percent ($18 billion) of the chocolate eaten in the world annually. U.S. retailers import $2 billion of this candy from Canada and Mexico; without NAFTA, 10 percent of the chocolate consumed in the United States would be affected by an additional $261 million in tariffs annually. Also, with more than half of all asparagus consumed in the United States imported from Mexico, NAFTA has helped keep the labor-intensive vegetable affordable. Without the trade agreement, the cost of importing asparagus would increase by $50 million a year.