Canada shares US concerns about Mexican trade with China as possible trade talks loom

TORONTO (AP) — Canada’s point person on U.S.-Canada relations said Tuesday she shares U.S. concerns that Mexico is acting as a backdoor for China to import cheaper goods into the North American market, as a review of the trade pact known as the U.S.-Mexico Agreement -Canada is threatening.

Deputy Prime Minister Chrystia Freeland said members of outgoing US President Joe Biden’s administration and supporters and advisers to President-elect Donald Trump have expressed “very serious” concerns to her about the issue, and Canada shares them.

“We are perfectly aligned with the United States, and that means we are not a backdoor for unfair Chinese traded goods,” Freeland said during a news conference. “The same cannot be said for Mexico.”

Canada announced this year that it is launching a 100% tariff on imports of Chinese-made electric vehicles, matching US tariffs imposed over what the countries say are China’s subsidies that give its industry an unfair advantage. Canada has also imposed a 25% tariff on Chinese steel and aluminum. Mexico does not have similar tariffs.

“We believe China’s intentional overcapacity is unfair and a threat to key Canadian sectors. It’s a threat to Canadian jobs, which is why we’ve imposed 100% tariffs on Chinese electric cars, 25% tariffs on Chinese steel and aluminum,” Freeland said.

Mexico’s foreign minister did not immediately respond to a message seeking comment.

Canadian Prime Minister Justin Trudeau called Trump after his election victory and the two discussed the trade deal Trump struck in his first term with Canada and Mexico, the USMCA, which replaced the North American Free Trade Agreement, or NAFTA.

Ottawa will soon focus on a planned review of the agreement in 2026.

Doug Ford, the premier of Canada’s most populous province, Ontario, suggested this month that Canada should move forward with a bilateral trade deal with the United States if Mexico does not crack down on Chinese auto imports entering North America.

During the last US election campaign, Trump proposed tariffs of 10% to 20% on foreign goods – and in some speeches he has mentioned even higher percentages.

Freeland chairs a special cabinet committee on US-Canada relations designed to address concerns about another Trump presidency. She spoke to reporters Tuesday after a committee meeting.

During Trump’s first term, his moves to renegotiate NAFTA and reports that he was considering a 25% tariff on the auto sector were seen as an existential threat in Canada at the time.

Canada is one of the most trade-dependent countries in the world, and 75% of Canada’s exports, which include automobiles, go to the United States

Freeland said this is a “serious time for our country” and called on Canadian business and government leaders to come together.