Governor Katie Hobbs Releases Study Touting Economic Benefits of USMCA, Recommendations to Strengthen Arizona’s Economy During Joint Review

Phoenix, AZ - Today Governor Katie Hobbs presented the findings of Arizona's United States-Mexico-Canada Agreement (USMCA) Economic Study during an event titled "USMCA Report on the Future of North American Trade." The report, spearheaded by Governor Hobbs, details the positive benefits of trade relationships with Mexico and Canada. It found that Arizona's business community largely supports retaining and enhancing, rather than renegotiating, the USMCA during this year's joint review.

The report provides Arizona-specific data and business insights on cross-border trade and investment. With Mexico as Arizona's top trading partner and Canada as second, this report's findings are intended to help ensure that future North American trade policy reflects the needs of Arizona's businesses and workers ahead of this year's USMCA joint review. This report follows a diplomatic and trade mission to Mexico City in October, led by Governor Hobbs and the Arizona-Mexico Commission, where the delegation met with top business and government leaders to further Arizona's ties with and opportunities in Mexico. Governor Hobbs also celebrated the opening of Arizona's first Canadian trade office.

"Protecting and strengthening our trade partnerships is essential to our emergence as a leading global economic hub and continuing to grow and create jobs," said Governor Katie Hobbs. "The USMCA renewal process is an opportunity to reaffirm our commitment to a vision of North America that is competitive and resilient and supports the prosperity of Arizona businesses and families. The insights presented in this report will help ensure that this year's trade agreement reflects the needs of Arizona's workers and businesses."

In the summer of 2025, Governor Hobbs and the Arizona-Mexico Commission commissioned the Seidman Research Institute at Arizona State University to develop a comprehensive analysis of Arizona's trade profile under the USMCA. The study conducted dozens of interviews and surveyed business leaders across Arizona, focusing on key sectors like advanced manufacturing, agriculture, construction, mining, transportation, and logistics.

The report concluded that Arizona's business community overwhelmingly believes USMCA is a driver of cost efficiency and supply chain resilience, as well as an essential tool for the facilitation of cross-border business and cooperation. Because of this, Arizona businesses do not want the USMCA replaced by a series of binational agreements or tariffs.

More than 85 percent of report participants suggested Arizona will be negatively impacted if USMCA is not renewed. Some of these negative outcomes include:

• Trade and supply chain disruptions
• Higher costs for businesses and consumers, and
• Job losses in any industry dependent on supply chain trade with Mexico, including the aerospace, auto manufacturing, agricultural, automobile and advanced manufacturing sectors.

The report also highlighted opportunities for enhancing USMCA to strengthen Arizona's competitiveness. Recommendations include:

• Creating clarity for supply chains and manufacturers by reintroducing the Certificate of Origin.
• Ensuring consistent and common application of USMCA standards such as labor and health standards across the three nations.
• Prioritizing cross-border infrastructure improvements.
• Considering more co-operation in critical minerals, pharmaceuticals, food supply and entertainment.

"Mexico and Canada represent two of Arizona's most important partners," said Sandra Watson, President and CEO of the Arizona Commerce Authority. "The USMCA report offers a road map to advance trade policy that supports Arizona families, businesses and workers. I'm grateful to Governor Hobbs, the Arizona-Mexico Commission, and all of our partners who contributed to this report."

"It was a priority for the Arizona-Mexico Commission that this study reflect business input," said Todd Sanders, President and CEO of the Greater Phoenix Chamber of Commerce and President of the Arizona-Mexico Commission. "This document is now a collective voice for the state of Arizona, designed to advance our state's best interests as we highlight what's working, the possibilities for improvement, and why Arizona's economy needs a strong, modernized North American trade framework."

"Arizona's economy is heavily tied with Mexico and Canada, and USMCA helps bolster North American supply chains, further integration and collaboration between allies," said Pat Risner, Hermosa President, South32. "It also increases national security while reducing reliance on foreign sources, especially for critical minerals that underpin our state's advanced manufacturing and semiconductor industries, and our nation's energy future."

"For over 140 years, Arizona has been considered the 'Gateway for Mexican Produce.' The USMCA trade agreement is a huge benefit for the residents and businesses in Arizona, and in fact agricultural trade and distribution is the primary private employment sector in southern Arizona," said Lance Jungmeyer, President, Fresh Produce Association of the Americas. "The new report helps illustrate that trade is not just global, it is local, and this kind of commerce has real benefits here at home in Arizona."

"USMCA plays a vital role in strengthening Arizona's competitiveness, providing advanced manufacturing companies like Lucid with the supply-chain stability and predictability needed to invest, scale production, and support high-value jobs," said Adrian Price, Senior Vice President of Operations at Lucid. "The Arizona-Mexico Commission's latest report highlights just how essential our trade partnerships with Mexico and Canada are to that success. Maintaining a strong USMCA is key to sustaining Arizona's economic momentum and expanding the opportunities ahead."

"As a medium sized manufacturer, the USMCA trade agreement is the principal framework for our strategic decision making. We congratulate Governor Hobbs and her administration for ensuring that all companies, regardless of size, are valued and encouraged to participate in this important conversation," said Carolynne Hunter, CEO of St. Clair Technologies. "This report will deepen our understanding of the impact of this trilateral agreement on a broad collection of businesses. Fully evaluating the impact of USMCA is the key to ensure the continued growth and prosperity of SMEs in Arizona and throughout North America."