Trudeau floats ‘other options’ if Mexico won’t deal with China – National trade issues
Prime Minister Justin Trudeau said Thursday he would like Mexico to remain a North American free trade partner but “we may have to look at other options” if the country does not address concerns about Chinese manufacturers working to enter the market.
Trudeau said he raised “real and genuine concerns about Chinese investment in Mexico” directly with Mexican President Claudia Sheinbaum at a meeting on the sidelines of the G20 leaders’ summit in Brazil on Monday. That concern has led some Canadian prime ministers to call on Canada to strike its own deal with the US under president-elect Donald Trump, cutting Mexico out of the Canada-United States-Mexico Agreement (CUSMA).
The prime minister said his first priority would be to stand up for Canadian workers and the Canadian economy, and that Ottawa had “left every door open” to protect those interests.
“Ideally, we’re doing that as a single North American market,” he told reporters at an unrelated news conference in Toronto. “But, pending decisions and choices made by Mexico, we may have to look at other options.” He wouldn’t say what those options might be.
“But let me say it again: my best position is that we continue to work well together to protect jobs in North America from being too strong or from the economic pressures that other countries have been responsible for.”
Sheinbaum told reporters in Mexico City on Wednesday that Trudeau “does not agree” with calls for Mexico to cut CUSMA, and that during their meeting at the G20 they agreed to keep the three-way trade agreement.
But he also said he told Chinese President Xi Jinping at the conference “that we have a trade agreement with North America, but there is room for relations with China, which was very important.”
Ontario Premier Doug Ford said last week that Mexico “imports cheap products” from China, then “puts a made in Mexico sticker on it and sends it” to Canada and the US, bypassing both CUSMA rules and Canadian and US tariffs. Chinese cars. Trump made similar comments about China using Mexico to gain access to the U.S. auto market, threatening the U.S. industry.
Ford called for a bilateral deal with the US and a separate one with Mexico “if Mexico wants it,” which Alberta Premier Danielle Smith said she agreed with “a thousand percent” in a CBC interview Friday.
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Ford said Wednesday after a phone call with his prime ministerial colleagues that they all support his request for separate trade deals with the United States and Mexico.
Trump has vowed to reopen CUSMA to address the issue when the trade deal comes up for review in 2026. He spoke negatively during the campaign about Chinese companies building manufacturing plants in Mexico, which is not the case, although China’s top EV maker BYD has plans for a Mexican facility.
Deputy Prime Minister Chrystia Freeland said Tuesday she shares “legitimate” concerns about Chinese investment in Mexico, and the fact Mexico may not have to comply with Canadian and US tariffs on Chinese electric vehicles and materials such as steel and aluminum.
He said these concerns were raised with him directly by members of the outgoing administration of President Joe Biden and the incoming Trump administration.
“We are not behind China’s unfairly traded goods,” Freeland said Tuesday. “However, the same cannot be said for Mexico.”
A report by the United States Trade Representative earlier this year warned that participants in the American industry “expressed concern that the increase in direct Chinese investment in the automotive sector in Mexico poses a serious threat to the competitiveness of the North American automotive industry” and could allow China to skirt prices.
According to the US industry group Coalition for a Prosperous America, which encourages the US to adopt a trade stance, more than 20 Chinese automakers have invested billions in Mexico.
The Biden administration in July imposed new tariffs on steel and aluminum imports from Mexico but elsewhere, a move aimed at tackling tariff evasion by China.
Mexico’s Vice Minister of Trade and Foreign Affairs, Luis Rosendo Gutierrez, said last month that Mexico will continue to prioritize the US and Canada for strategic alliances through CUSMA, but that does not mean that Mexico will “separate from China” or “deny investment in Mexico.”
A clause in the CUSMA rules of origin requires higher levels of North American parts for cars sold in the three countries compared to NAFTA, which Trump said China is also trying to use to bring Chinese parts to Mexico.
Trump, who has vowed to impose a 10 percent tariff on all imports, said Mexican imports could see a 25 percent tariff if the country does not stem the flow of migrants arriving at the U.S. border.
During the presidential campaign, Trump said he would impose tariffs of at least 200 percent or more on all cars imported from Mexico — which would hurt American automakers in the short term — and he also raised tariffs on Chinese companies operating in Mexico and violating CUSMA rules. up to 1,000 percent.
Mexico has vowed to retaliate with tariffs on American imports if Trump follows through on his threat, which the country’s economy minister has warned will bring economic damage to North America.
-In files from The Canadian Press and Reuters
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