Canadian Prime Minister Justin Trudeau expressed concerns about Mexico’s increasing trade with China during the Asia-Pacific Economic Cooperation summit in Peru on Saturday. With a possible renegotiation of the North American trade agreement looming, Trudeau emphasized that there are “concerns around the level of Chinese investment in Mexico” that need to be addressed.
Despite these reservations, Trudeau described Mexico as a “solid partner” and expressed hope for constructive negotiations with Mexico over the coming months. The US-Mexico-Canada Agreement (USMCA) was signed in 2018, replacing the North American Free Trade Agreement (NAFTA), and a decision on its renewal is due by July 2026.
Trudeau’s comments contrasted with those of some provincial leaders, including Ontario Premier Doug Ford and Alberta Premier Danielle Smith, who have advocated for a bilateral trade deal between Canada and the US due to Mexico’s more open trade with China. However, Trudeau remains hopeful that trilateral negotiations will allow them to renew and strengthen NAFTA in ways that benefit all three countries.
Statistics from Bloomberg reveal that Mexico imported $121 billion worth of goods from China in 2023, making it their second-largest trading partner after the US. In comparison, Canada imported $14 billion from Mexico during the same period.
This summer, Canada implemented a 100% tariff on electric cars and a 25% levy on steel and aluminum from China, following a similar move by the Biden administration to tighten trade restrictions with China.
In his conversations with world leaders at the APEC summit, Trudeau acknowledged that Trump’s return to power “came up a fair bit,” and expressed concerns about the potential consequences of his administration’s decisions. However, he emphasized that there are opportunities for cooperation and engagement that can deliver benefits for all parties involved.
Trudeau emphasized the importance of working towards win-win outcomes in trade negotiations, recognizing that President-elect Trump will prioritize what is good for the US but also acknowledging that there are ways to work together effectively. Overall, Trudeau’s comments reflect a cautious approach to the upcoming NAFTA renegotiation and a desire to maintain positive relationships with both Mexico and the US while addressing concerns about China’s growing influence in the region.
Source: Bloomberg
