President Trump has made renegotiation of NAFTA a key part of his platform since

Question

President Trump has made renegotiation of NAFTA a key part of his platform since the early days of his campaign. However, after 5 of the planned 7 rounds of negotiations, there has reportedly not been much progress.1 Many are concerned that, if renegotiation fails, the USA will withdraw from NAFTA. Briefly summarize how this would affect welfare for the following groups, being sure to offer a short explanation for your answer: US Workers in import competing industries » Mexican workers in exporting industries

Explanation / Answer

Us workers in import competing industries will gain because due to higher Us tariff after nafta fails there income will rise

Mexican workers in exporting industries will loose due to higher tariff in usa. Their incomes will decline and some of them will have to face unemployment.

Consumers in us will loose due to higher prices after introduction of tariffs and other barriers to trade. Similarly consumers in Mexico will loose due to higher prices. Note the result is because tariffs and other restrictions are against comparative cost and lower costs and lower prices

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