Deputy Prime Minister Chrystia Freeland said Wednesday she shares what she called “legitimate” concerns about Mexico’s trade policies regarding China, and that North American countries should be aligned on Chinese vehicle tariffs.
Freeland, who chairs the newly revived cabinet committee on Canada-U.S. relations, wouldn’t say if she agrees with Ontario Premier Doug Ford’s call this week to cut Mexico out of free trade talks over the issue, but said she has “some sympathy” with his concerns, which have also been raised by U.S. president-elect Donald Trump.
“I have been hearing for some time from people close to the incoming Trump administration, but also from other American business leaders and indeed from members of the outgoing Biden administration, some concerns that Mexico is not acting the way that Canada and the U.S. are when it comes to its economic relationship with China,” she told reporters after the committee’s latest meeting.
“I think those are legitimate concerns for our American partners and neighbours to have. Those are concerns that I share.”
Trump and Ford have accused Mexico of allowing Chinese companies to bypass rules in the Canada-United States-Mexico Agreement and export vehicles and parts into the U.S. and Canada through Mexican-built manufacturing plants.
Canada joined the U.S. earlier this year in slapping 100-per cent tariffs on Chinese imported electric vehicles and 25-per cent levies on Chinese steel and aluminum. Ottawa is undergoing further consultations on whether to expand the tariffs to other Chinese imports. Mexico has not followed suit with any tariffs on Chinese vehicles or components.
Ford said Tuesday that unless Mexico imposes similar tariffs, Canada and the U.S. should simply negotiate its own bilateral free trade agreement without Mexico.
“If Mexico wants a bilateral trade deal with Canada, God bless them,” Ford said. “But I’m not going to be drawn down with these cheap imports, taking men and women’s jobs from hardworking Ontarians.”
Freeland’s comments go further than Prime Minister Justin Trudeau did when asked about Ford’s comments Tuesday, though Trudeau alluded to efforts to bring Mexico in alignment with the U.S. and Canada.
“We’re going to continue to work with partners like the United States, and hopefully Mexico as well, to make sure that we are united in our desire to protect good jobs” as well as environmental and labour concerns, he said.
Freeland said Wednesday that Canada’s actions on Chinese imports “makes us the only country in the world which is fully aligned with the United States today when it comes to economic policy vis-a-vis China.”
Trump has said he wants to renegotiate CUSMA when it comes up for a scheduled review in 2026 to address the concerns with Mexico.
Chinese automakers such as BYD — one of the largest in the world — are seeking to build manufacturing plants in Mexico, where a number of American companies are already building their vehicles at a lower cost. The fear is that those Chinese companies can then take advantage of CUSMA’s duty-free import rules and flood the North American market with Chinese cars while avoiding the U.S. and Canadian tariffs.
CUSMA’s rules of origin clause requires higher levels of North American parts in vehicles sold in the three countries compared with NAFTA, which Trump has said China is also trying to exploit by bringing Chinese components through Mexico.
Trump has vowed to impose 25 per cent tariffs on all Mexican imports if it doesn’t 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 per cent or more on all vehicles imported from Mexico — which would hurt American automakers in the short term — and suggested levies on Chinese companies who operate in Mexico and bypass CUSMA rules as high as 1,000 per cent.
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.