Amid calls from premiers to exclude Mexico from a trilateral trade deal, Prime Minister Justin Trudeau reaffirms ties but agrees concerns over Chinese investments in Mexico must be addressed.
“Mexico was a solid partner in advancing the priorities of Canadians, the priorities and interests of workers across North America” during its previous negotiation with Canada and the United States, Trudeau said during a
press conference at the closing of the 2024 Asia-Pacific Economic Cooperation (APEC) leaders’ meeting in Peru on Nov. 16.
“There are concerns around the level of Chinese investment in Mexico that I think need to be addressed, but I am hopeful that we’re going to be able to work constructively over the coming months and perhaps years to ensure that North America remains an advantageous place for North Americans, for our workers, for our middle class, and creates real growth.”
The trilateral trade deal, originally called the North American Free Trade Agreement, or NAFTA, was renegotiated during Donald Trump’s first term as U.S. president and became the
Canada-United States-Mexico Agreement (CUSMA) in 2020. The now U.S. president-elect has pledged to revisit the deal when it comes up for review in 2026.
Trudeau’s comments follow Ontario Premier Doug Ford’s
recent call to potentially ouster Mexico from CUSMA. Ford raised concerns that Mexico has become a “backdoor” for Chinese goods despite efforts by Canada and the United States to impose trade sanctions on China over unfair practices such as overcapacity and state subsidies.
In October, Canada
imposed a 100 percent tariff on all Chinese-made electric vehicles (EVs) and a 25 percent tariff on steel and aluminum products from China, aligning with measures
imposed by U.S. President Joe Biden in May. Ford said Mexico should at least match these tariffs.
“If Mexico won’t fight transshipment by, at the very least, matching Canadian and American tariffs on Chinese imports, they shouldn’t have a seat at the table or enjoy access to the largest economy in the world,” Ford wrote on the
social media platform X on Nov. 12.
Alberta Premier Danielle Smith agrees with Ford’s concerns about Chinese investment in Mexico,
saying during her province-wide radio call-in program on Nov. 16 that the government should focus on a “Canada-first approach.”
In 2023,
China surpassed the United States as Mexico’s largest auto supplier, with exports reaching US$4.6 billion compared with US$4.4 billion from the United States, according to the Mexican Ministry of Economy. This reflects a shift in market share, with Chinese auto imports increasing by 100 percent year over year compared with just under 40 percent growth in U.S. imports.
Reports also indicated that several major Chinese EV makers including
BYD,
Chirey, and
MG Motor are planning to build factories in Mexico. These three companies make up the bulk of China’s autos output.
Canada’s Stance on China
Trudeau confirmed that Canada’s tariff on Chinese-made electric vehicles was mentioned during his recent discussion with Trump.
“We spoke directly about this issue. [Trump] inquired after Canada’s engagements and positioning around China,” Trudeau said.
“I pointed out we have 100 percent tariff on Chinese electric vehicles and 25 percent tariffs on steel and aluminum, and that seemed to align very much with the way he’s been thinking on it. But we’re going to continue to approach things in a robust way and make sure we’re protecting our interests as North American economies.”
Trudeau was asked about the growing divide between countries that do business with China and those that don’t, and whether Canada must take a side, given that South American countries are increasing trade with China while North American countries are imposing tariffs on the regime.
“Canada has a very strong trade relationship with China. We have a tremendous amount of agricultural exports. We import many goods from China. We’re going to continue to engage with China in responsible and robust ways,” Trudeau replied.
“Canadians benefit when we continue to trade with the world, and that’s something that we’re going to be doing. We'll be doing it eyes wide open in the case of of China and other countries,” he added.
In response to Canada’s recent tariff, China has
threatened to launch an anti-dumping investigation into canola imports from Canada. The regime had previously imposed a three-year ban on Canadian canola imports in 2019 during the diplomatic riff over Canada’s arrest of Huawei executive Meng Wanzhou.
In October, Trade Minister Mary Ng
said the government is looking to diversify canola exports to other Indo-Pacific markets in response to China’s threat.
