By Matina Stevis-Gridneff and Simon Romero
If President-elect Donald Trump’s warning of significant tariffs on Canada and Mexico was meant to create division, the initial signs suggest it might be effective.
Following his announcement on Monday, where he stated his intention to impose a 25% tariff on all imports from both neighboring countries, Ottawa and Mexico City adopted markedly different responses.
Mexico adopted a firm position, vowing to retaliate with its own tariffs on U.S. imports. Canada, on the other hand, highlighted its closer alignment with the United States compared to Mexico.
The trade pact among the three North American nations has been meticulously sustained over the last three decades through a careful equilibrium between the United States and its two principal allies.
As Trump readies to assume office, his readiness to dismantle that agreement to exert pressure on the two nations regarding migration might pave the way for the United States-Mexico-Canada agreement to be supplanted by individual bilateral accords with the United States.
Canada’s stance: Superior to Mexico
Even before Trump’s tariff declarations, Canadian officials had been preparing the ground for a negotiating position that emphasized distinctions between Canada and Mexico, both publicly and privately.
Officials from Canada have pointed out in discussions with Trump’s allies that it is performing considerably better than Mexico in three critical areas for Trump: borders, China, and employment, according to two senior Canadian officials involved in those talks, as well as a U.S. official familiar with the situation.
The three officials spoke anonymously to freely discuss the dialogues as they were not authorized to inform the media.
Regarding the border, which is the main trigger for Trump’s tariff warning, Canadian officials have informed Republicans, including Sen. Lindsey Graham, R-S.C., that Canada maintains a solid control over its border with the U.S. They indicated that a recent spike in migrants illegally crossing into the United States was just a temporary phenomenon, not a lasting trend.
Prime Minister Justin Trudeau of Canada spoke with Trump on Monday evening, relaying a strategy to further strengthen the border, according to another Canadian official who asked to remain anonymous due to the nature of the conversation.
On Tuesday, Trudeau and key members of his Cabinet urged calm and asserted their ability to collaborate with Trump.
“Instead of panicking, we’re finding constructive ways to safeguard Canadian jobs as we have in the past,” Trudeau stated in the House of Commons. “The notion of clashing with the United States is undesirable for anyone.” He added, “There are tasks we can accomplish together. That’s the work we will engage in seriously and methodically, without going into a state of alarm.”
The second area in which Canadian officials assert they are better partners for the United States compared to Mexico concerns trade with China.
Chrystia Freeland, Canada’s finance minister, has frequently highlighted Canada’s implementation of 100% tariffs on Chinese electric vehicles this summer as proof that Canada’s approach aligns with Trump’s tough stance on China.
Moreover, the two senior Canadian officials indicated that they raised this comparison privately in talks with Republicans, suggesting that Mexico has hesitated to cut economic ties with China.
“We are very much in alignment with this U.S. administration regarding China, which is a central concern for them,” Freeland remarked earlier this month.
Concerning jobs, the two senior Canadian officials have aimed to stress that the United States and Canada are more comparable in terms of wealth and wage standards than Mexico, arguing that Canada is not taking jobs away from Americans. Trump has accused Mexico of doing precisely that.
Trudeau has permitted members of his administration to adopt a “better than Mexico” outlook while assuring Mexico that he does not plan to fracture their alliance, according to the Canadian officials.
Sheinbaum responds
In Mexico, President Claudia Sheinbaum has adopted a contrasting strategy, focusing the tariff discussion mainly on the trade relationship between Mexico and the United States.
She has also played down remarks from Canadian officials as mere political theatrics, stating last week that Trudeau personally assured her he did not consent to removing Mexico from the agreement.
Sheinbaum added on Tuesday morning that she intends to send a separate letter to Trudeau detailing how Mexico plans to address the matters of tariffs and Chinese imports.
Nevertheless, she took a jab at Canada. During her daily briefing on Tuesday, Sheinbaum remarked that Canada’s imports of electric vehicles from China reached $1.6 billion in 2023, showcasing what she characterized as “exponential growth.”
“In Mexico’s case, the figure is significantly lower,” she noted.
Unlike Trudeau’s domestic vulnerabilities, which are raising questions about his management of the transition with Trump, Sheinbaum, who was recently elected, enjoys a much stronger support base for her approach.
Déjà vu
Some individuals are questioning Canada’s tactic of scrutinizing Mexico after Trump positioned Canada alongside Mexico in his tariff threats, drawing parallels to the earlier negotiations of the trade agreement among the three nations, which transpired during Trump’s first term.
“They were attempting to navigate Trump’s game, but the political gamble they made didn’t yield results,” stated Diego Marroquín Bitar, a researcher focused on North American trade at the Wilson Center, a Washington-based research institution. “Now they find themselves in a similar predicament as Mexico once again.”
Marroquín Bitar likened Canada’s current position to the reactions to Trump’s threats of imposing tariffs on both nations during his initial administration.
At that time, he recounted, Mexican negotiators aimed to keep Canadians well-informed of their own discussions with the first Trump administration. Ultimately, in 2020, the three nations reached a collective agreement to revise the trade deal that had governed North American trade for decades.
“It seems somewhat hypocritical that they now seek to cast Mexico aside,” Marroquín Bitar remarked.
Trade dynamics within North America are also shifting, potentially enhancing Mexico’s leverage in any negotiations.
“A few years ago, Canada was, by many measures, more significant than Mexico, particularly in trade,” noted Marroquín Bitar.
However, he added, Mexico is now “the primary supplier of imports to the U.S., its leading export destination.”
“Mexico is the largest purchaser of agricultural goods from the U.S.,” he stated, “more than Canada, more than China.”
