Federal Reserve researchers have found that U.S. tariff exposure was associated with weaker export performance in affected industries across Canada and Mexico. Their November 9 analysis also identified contrasting national export results, with Canadian shipments declining while Mexican exports increased, largely because of stronger machinery shipments.
Key Takeaways
- Federal Reserve researchers published their analysis on November 9, 2026.
- Canadian goods exports to the United States declined approximately 10%, while Mexican exports increased approximately 16%.
- A 10-percentage-point difference in tariff exposure was associated with approximately 4.9% weaker exports in Canada and 11.8% weaker exports in Mexico.
- Mexico’s export growth was concentrated in machinery shipments, particularly computing equipment.
- Excluding machinery, Mexican exports declined approximately 2%.
Federal Reserve Research Examines U.S. Tariffs and North American Exports
Federal Reserve researchers found that industries facing greater exposure to U.S. tariffs recorded weaker export performance in Canada and Mexico, despite different overall trade results between the two countries. Their November 9, 2026, analysis examined export activity following the 2025 tariff increases and compared differences in tariff exposure across industries.
The research, titled A Common Pattern behind Diverging Fortunes: U.S. Tariffs and Exports from Canada and Mexico, assessed how tariff exposure corresponded with export performance. It distinguished national export totals from industry-level results, showing that aggregate growth did not necessarily indicate stronger performance across all sectors.
Canada’s overall goods exports to the United States declined, while Mexico recorded aggregate growth. However, industries with greater tariff exposure experienced weaker export performance in both countries.
The U.S.-Canada trade relationship has also faced separate tariff measures covering selected Canadian imports. These include additional U.S. tariffs on Canadian goods, which affect sourcing costs and cross-border purchasing decisions for businesses handling covered products.
Canadian and Mexican Export Performance Diverges
Canadian goods exports to the United States declined approximately 10% in the comparison presented by the Federal Reserve researchers. Mexican exports increased approximately 16% over the same comparison, which measured the 12 months ending in April 2026 against calendar-year 2024.
The figures describe aggregate export performance rather than the results of individual industries. Canada’s decline indicated weaker overall goods shipments to its largest export market, while Mexico recorded higher total shipments despite the tariff-related pressures identified in the research.
The difference between the two national results does not mean that all Mexican industries benefited or avoided tariff exposure. Mexico’s export growth was concentrated in machinery shipments, while other export categories recorded a different outcome.
Separate Canadian countermeasures have also affected American exporters. Canada’s retaliatory tariffs on U.S. goods cover selected products across several industries, adding another dimension to cross-border trade conditions.
Tariff Exposure Corresponds With Weaker Industry-Level Exports
The Federal Reserve analysis identified a negative relationship between differences in tariff exposure and export performance in both countries. Its baseline estimates found that a 10-percentage-point difference in tariff exposure was associated with approximately 4.9% weaker exports in Canada and 11.8% weaker exports in Mexico.
These estimates represent differences in export performance associated with tariff exposure. They do not indicate a uniform percentage decline across all industries or the total change in either country’s exports.
The estimated relationship was larger for Mexico than for Canada. This difference indicates that the association between tariff exposure and export performance varied between the two countries in the researchers’ analysis.
The findings provide an industry-level perspective that aggregate trade figures cannot offer on their own. National export totals can increase even when industries facing greater tariff exposure record weaker shipments.
The U.S. current-account deficit provides a separate measure of cross-border transactions involving goods, services and income, offering additional information about the country’s international economic position.
Machinery Shipments Account for Mexico’s Export Growth
Mexico’s approximately 16% increase in aggregate exports to the United States was concentrated in machinery shipments, particularly computing equipment. The Federal Reserve researchers identified machinery as a major contributor to the country’s overall export performance during the comparison period.
Excluding machinery, Mexican exports declined approximately 2%. This difference shows that the machinery category substantially influenced the aggregate result, allowing total exports to increase despite weaker performance across other categories.
Computing equipment was particularly relevant to the composition of Mexican shipments. Its contribution meant that machinery accounted for an important portion of the country’s stronger export figures.
The distinction between machinery and other exports provides a clearer picture of Mexico’s trade performance. The aggregate increase did not extend evenly across all categories, and the results excluding machinery showed a decline.
The U.S.-China tariff framework identifies selected goods receiving more favorable treatment, illustrating differences in tariff conditions across international trading relationships.
Trade Findings Reveal Differences Across North American Industries
The Federal Reserve research compared Canadian and Mexican trade performance using aggregate export figures and industry-level tariff exposure estimates. Canada’s goods exports to the United States declined approximately 10%, while Mexico’s aggregate exports increased approximately 16%.
The industry-level estimates provided a different measurement. A 10-percentage-point difference in tariff exposure was associated with approximately 4.9% weaker exports in Canada and 11.8% weaker exports in Mexico.
For businesses involved in cross-border manufacturing, the findings distinguish national export performance from conditions affecting individual industries. The Mexican figures show that growth concentrated in machinery can coexist with declines across other export categories.
The comparison also establishes that greater tariff exposure was associated with weaker export performance in both countries, even though their overall export results differed. The analysis focused on shipments to the U.S. market and did not present the estimates as forecasts of future trade volumes.
Frequently Asked Questions
How have U.S. tariffs affected Canadian exports?
Federal Reserve research found that greater tariff exposure was associated with weaker export performance among Canadian industries. Canadian goods exports to the United States declined approximately 10% in the comparison examined.
How have U.S. tariffs affected Mexican exports?
Industries in Mexico with greater tariff exposure recorded weaker export performance. However, aggregate exports to the United States increased approximately 16% in the comparison period.
Why did Mexican exports increase despite higher U.S. tariffs?
Mexico’s export growth was concentrated in machinery shipments, particularly computing equipment. Excluding machinery, Mexican exports declined approximately 2%.
Which Canadian and Mexican industries experienced weaker export performance?
The research identified weaker performance among industries facing greater tariff exposure in both countries. The reported estimates measured the relationship between exposure differences and export performance rather than a uniform decline across every industry.
What did the Federal Reserve research find about tariff exposure and exports?
A 10-percentage-point difference in tariff exposure was associated with approximately 4.9% weaker exports in Canada and 11.8% weaker exports in Mexico. The findings came from the researchers’ industry-level analysis of North American exports to the United States.
