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Writer's pictureThe San Juan Daily Star

Trump’s tariff threat pits Canada against Mexico



President Joe Biden, from left, Mexican President Andres Manuel Lopez Obrador and Canada’s Prime Minister Justin Trudeau, pose for an official photo at the 10th North American Leaders’ Summit at the National Palace in Mexico City, Jan 10, 2023. President elect Donald Trump’s opening salvo in trade and border talks with the United States’ immediate neighbors is casting a harsh light on the North American alliance. (Doug Mills/The New York Times)

By Matina Stevis-Gridneff and Simon Romero


If President-elect Donald Trump’s threat of hefty tariffs on Canada and Mexico was intended as a divide-and-conquer strategy, early signs show that it might be working.


After his missive Monday, in which he said he planned to impose a 25% tariff on all imports from both of the United States’ neighbors, Ottawa and Mexico City followed starkly different approaches.


Mexico took a tough stance, threatening to retaliate with its own tariffs on U.S. goods. Canada, instead, emphasized that it was much closer aligned to the United States than Mexico.


The trade agreement between the three North American nations has been carefully maintained over the past three decades through a delicate balance between the United States and its two key allies.


As Trump prepares to take office, his willingness to tear that up to pressure the two countries on migration could open the door to the United States-Mexico-Canada agreement being replaced by separate bilateral deals with the United States.



Canada’s line: Better than Mexico


Even before Trump’s tariff statements, Canadian officials publicly and privately had been laying the groundwork for a negotiating stance that was based on drawing contrasts between Canada and Mexico.


Canada has been pointing out in meetings with allies of Trump that it is doing much better than Mexico in three areas that matter to Trump: borders, China and jobs, according to two senior Canadian officials involved in those discussions, as well as a United States official familiar with them.


The three officials spoke on condition of anonymity to freely discuss the conversations and because they were not authorized to brief the news media.


On the border, the key motivation behind Trump’s tariff threat, Canadian officials have been telling Republicans such as Sen. Lindsey Graham, R-S.C., that Canada has a firm grip on its border with the United States. A surge in migrants crossing into the United States without legal permission over the summer was a blip, not a trend, the officials have said.


Prime Minister Justin Trudeau of Canada spoke to Trump on Monday evening, and relayed a plan to further fortify the border, according to another Canadian official who requested anonymity to discuss a private conversation.


On Tuesday, Trudeau and senior members of his Cabinet called for calm and insisted that they would be able to work with Trump.


“Rather than panicking, we’re engaging in constructive ways to protect Canadian jobs like we have before,” Trudeau said in the House of Commons. “The idea of going to war with the United States isn’t what anyone wants.” He added, “There is work we can do together. That is the work we will do seriously, methodically. But without freaking out.”


The second area where Canadian officials claim to be better partners with the United States than Mexico is on trade with China.


Chrystia Freeland, Canada’s finance minister, has repeatedly brandished Canada’s imposition of 100% tariffs on Chinese electric vehicles this summer as evidence that Canada is in sync with Trump’s hawkish attitude toward China.


And the two senior Canadian officials said they had raised this contrast privately in conversation with Republicans, suggesting that Mexico was reluctant to sever economic ties with China.


“We are very aligned with this U.S. administration on the issue of China, which is a central issue for them,” Freeland said this month.


On jobs, the two senior Canadian officials have sought to emphasize that the United States and Canada are more comparable in terms of prosperity and wage levels than Mexico, suggesting that Canada isn’t stealing American jobs. Trump has accused Mexico of doing just that.


Trudeau has allowed the members of his government to pursue a “better than Mexico” approach while telling Mexico he does not intend to split their alliance, according to the Canadian officials.



Sheinbaum strikes back


In Mexico, President Claudia Sheinbaum has taken a different approach, centering the discussion about tariffs largely on the trade relationship between Mexico and the United States.


She has also downplayed statements from Canadian officials as political posturing, saying last week that Trudeau had personally reassured her that he did not agree with removing Mexico from the treaty.


Sheinbaum added Tuesday morning that she was planning on sending a separate letter to Trudeau laying out how Mexico would proceed on the issues of tariffs and Chinese imports.


Still, she took a shot at Canada. During her daily news conference Tuesday, Sheinbaum said Canada’s imports of electric vehicles from China reached $1.6 billion in 2023, demonstrating what she described as “exponential growth.”


“In Mexico’s case, the figure is much lower,” she added.


Unlike Trudeau’s political weakness at home, which is casting doubt over his handling of the Trump transition, Sheinbaum, who was elected recently, has much stronger domestic backing in her approach.



Déjà vu


Some are questioning Canada’s strategy of casting scrutiny on Mexico after Trump placed Canada alongside Mexico in his threat to impose tariffs, drawing comparisons to the previous negotiation of the trade agreement among the three countries, which happened during Trump’s first presidency.


“They were trying to play Trump’s game, but the political bet they made didn’t pay off,” said Diego Marroquín Bitar, a scholar who specializes in North American trade at the Wilson Center, a Washington research group. “Now they’re in the same position as Mexico again.”


Marroquín Bitar compared Canada’s current stance with the reactions to Trump’s threats of imposing tariffs on both countries during his first administration.


At that time, he said, Mexican negotiators sought to keep Canadians closely informed of their own discussions with the first Trump administration. In the end, the three countries agreed jointly in 2020 to overhaul the trade deal that had governed commerce in North America for decades.


“It’s a little hypocritical that they are now trying to throw Mexico under the bus,” Marroquín Bitar said.


Trade dynamics in North America are also in flux in ways that could end up strengthening Mexico’s hand in any negotiations.


“A few years ago, Canada was, in many metrics, more important than Mexico, at least when it comes to trade,” Marroquín Bitar said.


But now, he added, Mexico is “the top supplier of imports to the U.S., its top export destination.”


“Mexico is the country that buys the most agricultural products from the U.S.,” he said, “more so than Canada, more so than China.”

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