Canada's Prime Minister Justin Trudeau, left, and Mexico's President Claudia Sheinbaum talk during the G20 Summit leaders meeting in Rio de Janeiro, Monday, Nov. 18, 2024.Eraldo Peres/The Associated Press
Mexican President Claudia Sheinbaum Pardo says Prime Minister Justin Trudeau told her that he “does not agree” with kicking Mexico out of the United States-Mexico-Canada Agreement, which regulates North American free trade.
Ms. Sheinbaum dismissed threats by Canadian politicians to eject Mexico from the USMCA as little more than electioneering, as both countries brace for U.S. president-elect Donald Trump to enact his protectionist trade agenda.
“The Prime Minister does not agree with removing Mexico from the treaty. He told me this very clearly and we agreed to continue talking,” Ms. Sheinbaum told a regular press briefing at the National Palace in Mexico City on Thursday. “They are also having their own elections soon, so they are also using these subjects as part of an electoral campaign. But the Prime Minister does not agree.”
The comments appear to undermine Canadian efforts to align the country with Mr. Trump – and keep his ire focused on Mexico – ahead of the president-elect’s promised renegotiation of USMCA when it comes up for review in 2026.
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And they come as the Trudeau government works to make inroads with the incoming administration in a bid to get Canada exempted from Mr. Trump’s planned 10-per-cent to 20-per-cent tariffs on all goods entering the U.S.
Deputy Prime Minister Chrystia Freeland and Ontario Premier Doug Ford have both echoed Mr. Trump’s claims that Chinese companies are looking to use Mexico as a “back door” to get auto parts into the U.S. in defiance of American sanctions on Beijing.
Prime Minister Justin Trudeau attends an announcement regarding a two month suspension of GST on selected goods, at Vince’s Market, a grocery store in Sharon, Ontario, on Thursday Nov. 21, 2024.Chris Young/The Canadian Press
Mr. Trudeau said in response to Ms. Sheinbaum’s comments that his “first choice” is to continue the USMCA as a trilateral agreement, but that “we are leaving all doors open.” He did not rule out giving Mexico the boot if the country fails to assuage U.S. consternation about China.
“There have been real and genuine concerns about Chinese investment into Mexico that I brought up directly with the Mexican President,” he said at an unrelated announcement Thursday. “Ideally, we do that as a united North American market. But, pending decisions and choices that Mexico has made, we may have to look at other options.”
Foreign Affairs Minister Mélanie Joly, meanwhile, wrapped up a two-day visit to Washington on Thursday. She met with Rick Scott and Lindsey Graham, two Republican senators closely allied with Mr. Trump, among other legislators. Ms. Joly also pressed the message that Ottawa is in lock step with Washington on keeping Chinese goods from skirting American tariffs.
“They notice what we’re doing to make sure that we protect also our markets based on national-security grounds, on any form of back door that China could have,” she said at the Canadian embassy.
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One Canadian government source said the Trudeau government is looking to meet and build relationships with those close to Mr. Trump. It has been helpful that there are still some channels of communication open with people who were major players in the president-elect’s previous time in the White House, the source said: these include Jared Kushner, Mr. Trump’s son-in-law, and Robert Lighthizer, Mr. Trump’s former trade chief and still a trusted adviser.
Another government official said Ms. Freeland hosted a dinner last month in Washington for U.S. and Canadian business and labour leaders. A third said Ms. Joly tried to land a meeting with someone on Mr. Trump’s transition team while in Washington but was unsuccessful. The Globe and Mail granted confidentiality to the government sources to learn the details of private conversations.
The Mexican government and trade experts have pointed out that there is relatively little Chinese investment in Mexico and that no Chinese-made cars are being exported into the U.S. from the country. Dumping Mexico from the continental trading bloc, meanwhile, would likely cause a breakdown in auto industry supply chains and increase the price of vehicles because North America’s auto industry would lose its source of cheap labour.
“If Mexico were out of the USMCA, they would be free to make a deal with the Chinese. If we conceded that part of North America industrially to the Chinese, then there would be no competing with them,” said Flavio Volpe, head of the industry group that represents Canadian auto parts companies, many of which also have factories in Mexico.
Still, he said, Canada aligning itself with Mr. Trump, at least rhetorically, could help in negotiating exemptions to his tariffs in the short-term while ensuring Mexico works to mollify him in 2026 so USMCA is preserved.
Jorge Guajardo, a former Mexican ambassador to China, said Canada is trying to avoid Mr. Trump’s wrath by backing him on autos and diverting his attention from other areas in which Ottawa is more integrated with Beijing than Mexico is.
Unlike the U.S. and Mexico, Canada does not have tariffs on some Chinese plastics, he said, while Canadian exports of canola and investments by its financial sector make for stronger ties to China than Mexico has.
“Every country in the world is positioning itself to bring to the fore industries on which they are aligned with the U.S. in order to hide the ones on which they are not,” Mr. Guajardo said. “It would be so much easier for Mexico to completely decouple its economy from China’s than for Canada.”
As recently as earlier this year, Canada and Mexico aligned against the U.S. to interpret USMCA rules in such a way that would allow more non-North American content into North American-made vehicles. But since Mr. Trump won election earlier this month, the Trudeau government has pulled an about-face.
The three countries negotiated USMCA to replace the previous NAFTA pact at Mr. Trump’s behest during his previous term as president. But in the years since, Mr. Trump has apparently become dissatisfied with the deal and plans to trigger a clause that will allow for renegotiation starting in 2026.
Ms. Sheinbaum on Thursday argued that Canada and the U.S. “benefit a lot” from the trade agreement and that the benefits would ultimately ensure it continues.
“We think that, going forward, there are many arguments, many facts, much information that strengthen the maintenance of the agreement,” she said.
With a report from Laura Stone