Reversing Regional Integration: The Potential Costs for Agriculture in the <scp>USMCA</scp>

ABSTRACT This paper examines potential effects of reversing North American integration, focusing on recent USMCA trade disputes over Mexico's GE corn import ban. Using a CGE model, we simulate Mexico's reduction in GE grain imports and U.S. tariff escalation with partner retaliation. Results show significant disruptions: U.S. grain exports fall by 9.3%, and Mexican grain output rises 16% amid sectoral inefficiencies. Broad‐based tariffs distort production, reduce GDP in Mexico and Canada, and shift global trade patterns. U.S. subsidies partially offset domestic losses but increase fiscal burdens. Our findings highlight the high economic costs and global spillovers from reversing regional agricultural integration.