Ontario Premier Doug Ford speaks to reporters as Canada's premiers hold a press conference to close the Council of the Federation meetings in Halifax on July 17.Darren Calabrese/The Canadian Press
Doug Ford says all of Canada’s premiers are united behind his call for a bilateral trade deal with the United States, leaving Mexico on its own for separate negotiations, as Ottawa seeks to skirt the tariff wall threatened by U.S. president-elect Donald Trump.
The Ontario Premier first floated the idea last week, echoing the incoming Trump administration’s concerns that Mexico is a “backdoor” for cheap Chinese auto parts and demanding that the U.S.’s southern neighbour match new Canadian and U.S. tariffs on Chinese electric vehicles.
On Wednesday, Mr. Ford emerged from his office at Queen’s Park for a noon-hour press conference to tell reporters that he had just spoken with his provincial counterparts and that they support his approach.
“I just got off the phone with all the premiers, and there’s a clear consensus that everyone agrees that we need a bilateral trade deal with the U.S. and a second bilateral trade deal with Mexico,” Mr. Ford said.
The federal government has not ruled out following Mr. Ford’s lead and trying to sideline Mexico. Deputy Prime Minister Chrystia Freeland said Tuesday that Ottawa shares Mr. Trump’s “grave concerns” that China is using Mexico to access North American markets.
Mr. Trump on Wednesday selected former Michigan congressman Pete Hoekstra to be U.S. ambassador to Canada. In a statement announcing the nomination, the president-elect made a point of mentioning the trade talks that took place in his first term: “I overhauled the disastrous NAFTA Agreement, the worst Trade Deal in the History of the United States, which was switched to the USMCA (Mexico/Canada), which no one thought could be done.”
The exclusion of Mexico from trade talks with the U.S. would mark a departure from 30 years of three-way free trade on the continent. The North American free-trade agreement took effect in 1994 and its successor, the United States-Mexico-Canada Agreement (USMCA), was signed after tense trade talks during Donald Trump’s first term.
In addition to pledging large tariffs on all foreign imports, the president-elect has vowed to renegotiate the continental trade deal when it comes up for review in 2026.
Despite the looming protectionist threats, Mr. Ford’s rallying of the premiers may not actually go over well with industry.
In an interview shortly before the Premier’s statement, Canadian Manufacturers & Exporters association president Dennis Darby said he was unhappy to see Canada responding to Mr. Trump’s victory by already having public discussions about abandoning the trilateral trade agreement with Mexico and the U.S.
“I hate when we negotiate with ourselves,” said Mr. Darby, who was presiding over a long-planned conference of Canadian, U.S. and Mexican manufacturing leaders on Wednesday in Ottawa. “Many Canadian companies are invested in all three countries. So I don’t think it serves anyone’s interest at this point to start saying, ‘let’s cut Mexico out.’ "
Mr. Darby expressed some hope that such calls are meant as a shot across the bow to get Mexico to take more seriously concerns about China using that country to access the rest of the North American market. But he suggested that Canada should also be focusing on making the case to Mr. Trump about why the U.S. benefits from the three countries forming a “Fortress North America” to compete internationally.
Mr. Ford, who currently holds the rotating chair of the Council of the Federation, made up of all 10 provincial premiers and the three territorial leaders, also said the premiers will be asking for a meeting with Prime Minister Justin Trudeau on the issue and that they are planning a “Team Canada” push to make Canada’s case to the U.S.
Mr. Trudeau has said that his ideal and preferred scenario is for a three-way trade deal, but on Tuesday he also emphasized that his government would prioritize Canada’s interests.
Federal Industry Minister François-Philippe Champagne, speaking at the Wednesday conference of continental industry leaders, said close ties between the three countries provide economic security amid other global trade conflicts. He did not directly comment when asked by reporters about provincial calls for cutting Mexico out of the USMCA.
According to the English-language website of the Mexican newspaper El Dictamen, Mexican President Claudia Sheinbaum dismissed Mr. Ford’s idea last week, saying it “has no future” and pointing out that Mexico demanded that Canada remain in the last round of talks under Mr. Trump when the U.S. had suggested leaving its northern neighbour out.
Mr. Trudeau said he raised the concerns about Chinese investment in Mexico with Ms. Sheinbaum on the sidelines of the G20 leaders’ summit in Brazil this week.
The premiers are due to meet in Toronto on Dec. 15 and 16, a gathering Mr. Ford said would focus on U.S. trade concerns. Ontario’s Premier also said they had invited a few governors of U.S. states to attend, but that he was not sure if any would do so. He said the premiers would also head down to the U.S. as “Team Canada” in February or March, after Mr. Trump’s inauguration, and potentially be in Washington for a meeting of U.S. state governors.
U.S. policy makers have become increasingly concerned about rising Chinese investment in Mexico. Official Mexican data show Chinese foreign direct investment (FDI) in the country has averaged only US$280-million a year between 2020 and 2023, less than 1 per cent of total FDI in that period. However, analysis from U.S. consulting firm the Rhodium Group suggests that the actual amount may be four times larger – with the lion’s share going to the auto sector.
China is hardly alone in investing in Mexico’s burgeoning auto sector, which has seen significant inflow of capital from German, Japanese and Korean automakers looking for low-cost labour and privileged access to the U.S. auto market.
The difference is that America policy makers across the political spectrum are extremely worried about competition from China’s electric-vehicle producers, who are making high-quality cars at a fraction of the cost of incumbent automakers around the world.
Currently there are no Chinese EV manufacturing plants in Mexico, but several companies, including BYD and Chery, have announced plans to locate factories in Mexico.
Jorge Guajardo, a former Mexican ambassador to China, said the complaints about Chinese investment in Mexico are hugely overblown. But he acknowledged that the country will have to address U.S. concerns about China.
Mr. Guajardo, now a Washington-based business consultant with the company DGA, said every country is trying to highlight areas in which it aligns with the U.S. and play down areas in which it doesn’t in a bid to stay on Mr. Trump’s good side.
While it’s true that Canada and the U.S. align on tariffs for electric vehicles from China, for instance, he pointed to other areas in which they do not: On some petrochemicals used to make plastic bottles, for instance, the U.S. and Mexico both apply hefty tariffs on Chinese imports, while Canada does not.
Flavio Volpe, the head of Canada’s Automotive Parts Manufacturers’ Association, said this country and the U.S. need Mexico in order to effectively compete with China.
But he suggested Mr. Ford’s rhetoric could serve a couple of tactical purposes: It focuses Canada’s attention in the short term on avoiding Mr. Trump’s promised tariffs of 10 to 20 per cent, while pressing Mexico to assuage the president-elect’s auto-related concerns in order to ensure that the USMCA stays intact when the pact comes up for review in 2026.
With reports from The Canadian Press