Trade & Tariffs Timeline
GATT
WTO
IMMEX
APTA
CUSFTA
NAFTA
USMCA
1947-1994
In the aftermath of World War II and to rebuild the economies of Europe and Asia, the General Agreement on Tariffs and Trade (GATT) was formed to reduce tariffs and trade barriers and encourage cooperation with Western Alliance nations. The GATT served as a counterweight to the centrally planned economies of the “Second World,” those countries of the Soviet Bloc. The Soviet Union, and later Russia, would be excluded from GATT, reflecting their limited engagement with the liberal economic order during the Cold War era.
The rules of trade would be revised through GATT rounds, with each successive round addressing political and economic changes to alter trade policy on tariffs, adding new members, creating a legislative framework, subsidies, and other constantly evolving trade issues. As developed “First World” economies advanced, problems started to emerge with the GATT, which was originally formed for trading goods, not services. There was a growing need to resolve intellectual property and investment issues and find a binding mechanism to address trade disputes.
With the global economy evolving and needing more sophisticated infrastructure, GATT was retired, with the World Trade Organization taking its place to provide a binding resolution system to enforce rulings under a defined legal system.
The General Agreement on Tariffs and Trade (GATT)
1995-Present
The World Trade Organization (WTO)
Established in 1995, the World Trade Organization (WTO) serves as a rules-based framework for international trade. This legal system allows global supply chains to develop, letting goods and funds flow through international borders, defining the current economic system of globalized trade and international finance.
China joined the WTO in 2001, forever changing the international order. By serving as the factory for the world, China would lower consumer prices and recycle those dollars earned from its trade surplus back into the U.S. economy by purchasing U.S. Treasuries, which helps keep interest rates low.
The GATT and, eventually, the WTO were global efforts to reduce trade barriers. Regional efforts, such as the European Union and NAFTA in the United States, have also changed the nature of trade. Like the GATT, the United States’ regional trade agreements originated after World War II.
1965-Present
Bracero Program / Maquiladora Program - Now (IMMEX)
The Bracero Program was the most extensive guest worker program in the United States, importing farm and railroad labor to assist with the war effort during World War II. This program would end during the Civil Rights era in 1964 due to labor and racial concerns, leaving millions of Mexican workers unemployed at the Mexican border. To combat growing unrest, the Mexican government instituted the Border Industrialization Program in 1965 to attract U.S. investment to factories along the border, creating a stationary labor solution and reducing an overreliance on migratory labor into the U.S. Firms could remain in Mexico, importing raw materials into the country duty-free for assembly into automobiles, textiles, and electronics. The government would improve the rail, electricity, water, and road infrastructure along the border, establishing cross-border supply chains that exist to this day.
1965-2001
Canada-U.S. Automotive Products Agreement (APTA)
The U.S. automotive industry has co-evolved with Canada since the car was invented. Ford Motor Company of Canada was established in 1904, only one year after being founded in the United States. Due to tariffs, car and truck parts would be made in the United States and assembled in Canada to build distinctly Canadian cars. This was a costly and inefficient system, and the Canada-U.S. Automotive Products Agreement (Auto Pact) would remove these tariffs and integrate these two separate auto industries, allowing for one supply chain requiring larger plants and uniform regulation between the two countries. This led to thousands of new jobs and cars, lower consumer prices, and a highly developed and specialized auto industry built around the US-Canada border. The Auto Pact would remain in effect from 1965 until it was ultimately declared illegal by the WTO in 2001.
1989-1994
Canada-United States Free Trade Agreement (CUSFTA)
The success of the Auto Pact laid the groundwork for deeper economic integration between the United States and Canada with a formal effort to eliminate trade barriers, encourage cross-border investment, and establish long-term bilateral cooperation through the Canada–United States Free Trade Agreement. This agreement was signed by President Ronald Reagan in 1988 and proved to be a compelling case study of the benefits of regional trade liberalization. Due to its success, Mexico approached the U.S. in the early 1990s to explore a similar bilateral deal, leading policymakers in all three countries to recognize the potential of a single unified framework to reduce trade barriers and create a unified trilateral trade bloc, the North American Free Trade Agreement (NAFTA).
1994-2020
North American Free Trade Agreement (NAFTA)
Generations of economic interdependency along the U.S. border were finally codified into law that would eliminate most tariffs, establish clear rules of trade, and integrate the supply chains in automotive, agriculture, electronics, and textiles into one large unified North American market. NAFTA would allow for increased trade between the three member nations, with trilateral trade more than tripling from 1993 to 2016.
1994-2020
North American Free Trade Agreement (NAFTA)
NAFTA officially ended in 2020 and was replaced by a new agreement that was called the United States – Mexico – Canada Agreement (USMCA) in the United States, the Tratado entre Mexico, Estados Unidos y Canada (T-MEC) in Mexico, and the Canada – United States – Mexico Agreement (CUSMA) in Canada. This new agreement would build on the original NAFTA plan of decreasing trade barriers but would be updated to address problems unforeseen in the original document. USMCA seeks more substantial labor and environmental standards, digital trade provisions, updated intellectual property protections, and a Sunset Clause, requiring review every six years and an automatic expiration after 16 years unless renewed.
The first “Joint Review” for this new trade agreement is up in 2026, with members expected to address the rise in digital trade, regulation for AI, and other significant economic changes since the signing of the original documents. The USMCA has gained importance due to rising geopolitical turmoil, including COVID-19, the Russia–Ukraine war, and increased economic tensions with China.
Recent developments, however, cast doubt on the future of this trade agreement, notably the imposition of unilateral tariff declarations by the U.S. The future of the supply chains and industrial infrastructure built along both sides of the United States border to facilitate trade with Canada and Mexico remains uncertain, as increased trade barriers put generations of successful compromise at risk.