Prime Minister Justin Trudeau said Thursday he would prefer Mexico remain a North American free trade partner but “we may have to look at other options” if the country doesn’t address concerns about Chinese manufacturers working to wedge into the market.
Trudeau said he raised the “real and genuine concerns about Chinese investment into Mexico” directly with Mexican President Claudia Sheinbaum in a meeting on the sidelines of the G20 leaders’ summit in Brazil on Monday. Those concerns have led some Canadian premiers to call for Canada to strike its own bilateral deal with the U.S. under incoming president-elect Donald Trump, cutting Mexico out of the Canada-United States-Mexico Agreement (CUSMA).
The prime minister said his first priority will be to stand up for Canadian workers and the Canadian economy, and that Ottawa was “leaving all doors open” to secure those interests. “Ideally, we do that as a united North American market,” he told reporters at an unrelated press conference in Toronto. “But, pending decisions and choices that Mexico has made, we may have to look at other options.” He would not say what those options might be.
Sheinbaum told reporters in Mexico City on Wednesday that Trudeau “doesn’t agree” with the calls to cut Mexico out of CUSMA, and that during their meeting at the G20 they agreed on maintaining a three-way trade deal. But she also said she told Chinese President Xi Jinping at the summit “that we have a trade agreement with North America, but that there was room for a relationship with China, which was very important.”
Ontario Premier Doug Ford said last week that Mexico is “importing cheap products” from China, then “slapping a made-in-Mexico sticker on and shipping it up” into Canada and the U.S., bypassing both CUSMA rules and Canadian and American tariffs on Chinese vehicles. Trump has made similar comments about China using Mexico to access the U.S. auto market, threatening the American industry.
Ford called for a bilateral deal with the U.S. and a separate one with Mexico “if Mexico wants,” which Alberta Premier Danielle Smith said she agreed with “1,000 per cent” in a CBC interview Friday.
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Deputy Prime Minister Chrystia Freeland said Tuesday that she shares the “legitimate” concerns about Chinese investment in Mexico, and the fact Mexico has yet to align with Canadian and U.S. tariffs on Chinese electric vehicles and materials like steel and aluminum. She said the concerns have been raised to her directly by both members of the outgoing administration of President Joe Biden and the incoming Trump administration. “We are not a backdoor to Chinese unfair traded goods,” Freeland said Tuesday. “However, the same cannot be said of Mexico.”
According to the U.S. industry group Coalition for a Prosperous America, which promotes the U.S. taking a combative trade stance, more than 20 Chinese auto manufacturers have invested billions in Mexico.
A report by the United States Trade Representative earlier this year warned that U.S. industry stakeholders “expressed concerns that increasing Chinese foreign direct investment in the automotive sector in Mexico poses a significant threat to the competitiveness of the North American auto industry” and could allow China to skirt tariffs.
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Mexico has vowed to retaliate with its own tariffs on American imports if Trump follows through with his threat, which the country’s economic minister warned would bring economic harm to North America.
Conclusion:
The tensions between Canada, Mexico, and the U.S. over Chinese investment in Mexico are a complex issue that requires careful consideration and negotiation. While Canada wants to maintain a united North American market, it must also prioritize the interests of its workers and economy.
FAQs:
Q: What are the concerns about Chinese investment in Mexico?
A: The concerns are that Chinese manufacturers are investing in Mexico to gain access to the U.S. market, bypassing Canadian and American tariffs on Chinese vehicles.
Q: Why is Canada considering a bilateral deal with the U.S.?
A: Canada wants to protect its workers and economy from the perceived threat of Chinese investment in Mexico.
Q: Will Mexico retaliate if Trump imposes tariffs on its imports?
A: Yes, Mexico has vowed to retaliate with its own tariffs on American imports if Trump follows through with his threat.
Q: What is the impact of Chinese investment in Mexico on the North American auto industry?
A: The U.S. industry group Coalition for a Prosperous America warns that increasing Chinese foreign direct investment in the automotive sector in Mexico poses a significant threat to the competitiveness of the North American auto industry.
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