Deputy Prime Minister and Finance Minister Chrystia Freeland says she shares Washington’s concerns about whether Mexico is “aligned” with Canada and the U.S. on trade policy — specifically when it comes to China.
Canada and the U.S. have imposed steep tariffs on Chinese-made electric vehicles to protect North America’s nascent EV industry. But there are growing concerns about China accessing the North American EV market through Mexico — the third member of the continental trade agreement known in Canada as CUSMA (the Canada-United States-Mexico Agreement).
Freeland told reporters Wednesday she’s heard concerns about China’s trade engagement with Mexico from both current U.S. President Joe Biden’s administration and incoming president-elect Donald Trump’s team.
Deputy Prime Minister Chrystia Freeland says she’s heard U.S. officials and business leaders warn that Mexico is not acting the way Canada and the U.S. are in its economic relationship with China. Freeland did not say whether she agrees with Ontario Premier Doug Ford’s suggestion that Ottawa and Washington create a bilateral trade agreement if Mexico continues to be a back door for importing cheap Chinese materials.
“I’ve heard … some real concerns about whether Mexico is fully aligned when it comes to its policies vis-a-vis China,” Freeland said.
“I think those are legitimate concerns for our American partners and neighbours to have. Those are concerns that I share.”
Mexico has ramped up car manufacturing in recent years and most of that product is being sent to the U.S.
Chinese EV maker BYD has been scouting out locations for a Mexican factory that could supply the U.S. market.
Trump has said he could slap big tariffs on Mexico — he’s floated tariffs as high as 200 per cent on vehicles imported from that country — to make it less attractive for automakers to build plants there.
“All I’m doing is saying … I’ll put a number where they can’t sell one car,” Trump said of Mexico in October, referring to threatened tariffs. “I don’t want them hurting our car companies.”
Freeland’s comments came the day after Ontario Premier Doug Ford suggested cutting Mexico out of a future trade deal with Canada and the U.S. altogether.
Ontario Premier Doug Ford says Mexico is undercutting Canadian workers by serving as a back door for Chinese imports. On Tuesday, Ford issued a statement floating a possible bilateral trade agreement between the U.S. and Canada.
“Free trade needs to be fair,” Ford said Tuesday.
“Since signing on to the United States-Mexico-Canada Agreement, Mexico has allowed itself to become a backdoor for Chinese cars, auto parts and other products into Canadian and American markets, putting Canadian and American workers’ livelihoods at risk while undermining our communities.”
Juan Carlos Baker — a former Mexican vice minister for trade who took part in the CUSMA negotiations — told CBC News Network’s Power & Politics on Wednesday that the idea that Mexico serves as a backdoor for Chinese goods is “false.”
Baker said that goods shipped from Mexico align with the rules of origin laid out in the trilateral trade agreement. He also said Mexico has increased tariffs on Chinese goods within the past year.
Ontario Premier Doug Ford pitched kicking Mexico out of the North American free trade pact. Former Mexican USMCA negotiator Juan Carlos Baker says Ford’s comments ‘do not’ reflect the reality of North American trade.
“Those allegations that Mexico has [allowed itself] to be a springboard for Chinese products is not only false, but also, I believe, very dangerous,” Baker told host David Cochrane.
Freeland was asked directly if Ford’s idea of a bilateral agreement with the U.S. should be on the table. She didn’t state clearly whether she supports the idea and instead insisted that Canada is “aligned” with the U.S. on China and trade.
“Our economic relationship with the United States is strong, it is mutually beneficial” she said.
“We are very aligned with [Trump’s incoming] administration on the issue of China, which is a central issue for them.”