TORONTO — The Canadian government’s key representative for relations with the U.S. expressed on Tuesday her alignment with American apprehensions regarding Mexico potentially acting as a channel for China to bring in lower-cost goods to the North American market. This discussion comes as there is an impending review of the trade agreement known as the U.S.-Mexico-Canada Agreement (USMCA).
Deputy Prime Minister Chrystia Freeland noted that officials from outgoing President Joe Biden’s administration, as well as advisors and supporters of President-elect Donald Trump, have conveyed “very grave” concerns to her about this issue, a sentiment that Canada wholeheartedly shares.
“We are fully aligned with the United States, and that signifies we are not a conduit for unfairly traded Chinese goods,” Freeland remarked during a news conference. “Unfortunately, this cannot be said for Mexico.”
This year, Canada introduced a 100% tariff on electric vehicles manufactured in China, responding to similar tariffs enacted by the U.S. due to what both nations claim are subsidies from China that afford its industry an unfair edge. Apart from electric vehicles, Canada also applied a 25% tariff on Chinese steel and aluminum, while Mexico has not instituted comparable tariffs.
Freeland articulated, “China’s deliberate overcapacity poses an unfair challenge and a risk to vital sectors within the Canadian economy. It jeopardizes Canadian jobs, which is the rationale behind our 100% tariffs on Chinese EVs and 25% tariffs on Chinese aluminum and steel.”
Following the election of Donald Trump, Canadian Prime Minister Justin Trudeau reached out to him to discuss the trade agreement that was forged during Trump’s first term, which became the USMCA and succeeded the North American Free Trade Agreement (NAFTA). Ottawa is set to concentrate on a review of this agreement, scheduled for 2026.
Ontario’s Premier Doug Ford proposed earlier this month that if Mexico does not take action to restrict Chinese automotive imports into North America, Canada should move forward with negotiating a bilateral trade agreement exclusively with the U.S.
During the recent U.S. election campaign, Trump suggested implementing tariffs ranging from 10% to 20% on foreign goods, occasionally hinting at even steeper tariffs in his speeches.
Freeland leads a specialized cabinet committee focused on U.S.-Canada relations, which has been established to tackle the concerns that arise with a potential Trump presidency. She addressed the media on Tuesday following a meeting of this committee.
Trump’s initial term was marked by a push to renegotiate NAFTA, with concerns over proposed 25% tariffs on the automotive sector, which were viewed as a significant threat to Canada at that time.
As a nation heavily reliant on trade, Canada sends 75% of its exports, including automobiles, to the U.S., cementing the importance of these relationships. Freeland emphasized, stating that this is a “serious time for our country” and urged leaders in both the business and governmental sectors to unite in their efforts.