Deputy Prime Minister and Finance Minister Chrystia Freeland has expressed a deep alignment with the concerns raised by Washington regarding Mexico’s coherence with Canada and the United States on essential trade policies, particularly concerning their approach to China.
The ongoing collaboration between Canada and the U.S. has led to the imposition of substantial tariffs on electric vehicles manufactured in China, aimed at safeguarding the developmental phase of North America’s burgeoning electric vehicle industry. However, apprehensions have intensified that China could exploit Mexico—a crucial partner in the trade agreement known in Canada as CUSMA (Canada-United States-Mexico Agreement)—to penetrate the North American electric vehicle market.
Freeland revealed to reporters on Wednesday that both the current U.S. President Joe Biden’s administration and the team of president-elect Donald Trump have raised significant concerns over China’s growing trade relations with Mexico.
Freeland emphasized that U.S. officials and business representatives have alerted her to a disturbing trend regarding Mexico’s economic engagements with China that diverges from the strategies embraced by Canada and the U.S. Although Freeland refrained from explicitly endorsing Ontario Premier Doug Ford’s proposition for Ottawa and Washington to establish a bilateral trade agreement should Mexico persist as a conduit for inexpensive Chinese imports, she acknowledged the gravity of the discussions.
“I’ve heard … some real concerns about whether Mexico is fully aligned when it comes to its policies vis-a-vis China,” Freeland articulated, fully acknowledging the concerns of their American partners.
“I think those are legitimate concerns for our American partners and neighbours to have. Those are concerns that I share,” she affirmed, reflecting a collaborative stance on economic relations.
In stark contrast, Mexico has significantly boosted its car manufacturing sector in recent years, with a substantial portion of its output directed toward the U.S. market.
Recently, the Chinese electric vehicle manufacturer BYD has actively been exploring potential sites for a new factory in Mexico, which could serve as a supplier for the expansive U.S. market.
Trump has made headlines for suggesting that he might impose hefty tariffs on vehicles coming from Mexico, with numbers floating as high as 200 percent, aiming to diminish the appeal for automakers to establish manufacturing facilities there.
“All I’m doing is saying … I’ll put a number where they can’t sell one car,” Trump stated in October, clearly asserting his intentions aimed at shielding American car manufacturers from unfavorable competition.
Freeland’s remarks came on the heels of Ontario Premier Doug Ford’s recent suggestion about potentially excluding Mexico from any future North American trade agreements entirely.
Ontario Premier Doug Ford has articulated concerns that Mexico may be undermining Canadian workers by acting as a conduit for cheap Chinese imports, advocating for a possible bilateral trade agreement between the U.S. and Canada as a solution.
“Free trade needs to be fair,” Ford stressed emphatically, outlining his perspective on the current trade dynamics.
“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,” Ford asserted, framing the consequences of this trade dynamic as fundamentally inequitable.
In response, Juan Carlos Baker, a former Mexican vice minister for trade involved in the CUSMA negotiations, argued on a recent episode of CBC News Network’s Power & Politics that the notion of Mexico serving as a backdoor for Chinese goods is unfounded and misleading.
Baker emphasized that products shipped from Mexico conform fully to the rules of origin stipulated in the trilateral trade agreement, countering Ford’s claims. Furthermore, he noted that Mexico has implemented increases in tariffs on Chinese goods within the past year.
“Those allegations that Mexico has [allowed itself] to be a springboard for Chinese products are not only false but also, I believe, very dangerous,” Baker articulated during the discussion.
When asked if she supports Ford’s idea of establishing a bilateral agreement with the U.S., Freeland refrained from giving a straightforward answer, instead asserting Canada’s firm alignment with the U.S. concerning both China and overall trade policies.
“Our economic relationship with the United States is strong, it is mutually beneficial,” she emphasized, reinforcing the collaborative spirit in their economic engagements.
“We are very aligned with [Trump’s incoming] administration on the issue of China, which is a central issue for them,” her statement implied a future-oriented collaboration aimed at tackling shared challenges in international trade.
What are the potential implications for Canadian workers if Mexico continues to strengthen its trade relationship with China?
**Interview with Deputy Prime Minister and Finance Minister Chrystia Freeland on Trade Relations and Concerns Over Mexico’s Engagement with China**
**Interviewer:** Thank you for joining us today, Deputy Prime Minister Freeland. Given your recent comments on the concerns regarding Mexico’s trade policies in relation to China, can you elaborate on what those specific concerns are?
**Chrystia Freeland:** Thank you for having me. The concerns we’ve been discussing with our American partners primarily focus on the growing trade relations between Mexico and China. There is a legitimate worry that Mexico may not fully align with the trade strategies we’ve developed here in Canada and in the United States, particularly when it comes to protecting our emerging electric vehicle industry from Chinese imports.
**Interviewer:** The U.S. has imposed significant tariffs on Chinese-made electric vehicles to protect North American markets. Do you believe these measures are sufficient given the situation with Mexico?
**Chrystia Freeland:** The tariffs are a crucial first step, but we must remain vigilant. The fear is that Mexico, as a key partner in the CUSMA agreement, could become a gateway for Chinese products if their engagement with China continues to diverge from our policies. We need a collective approach to ensure our economic interests are safeguarded.
**Interviewer:** You’ve mentioned that both President Biden and President-elect Trump have raised concerns. How do you see this bipartisan issue being addressed moving forward?
**Chrystia Freeland:** It’s vital that this remains a collaborative effort. The concerns from both administrations underscore the importance of maintaining a united front on trade issues. While I haven’t officially backed Premier Ford’s call for a separate trade agreement, I share the seriousness of these discussions. Open dialogue and possible solutions must be on the table.
**Interviewer:** Ontario Premier Doug Ford suggests that Mexico’s current trade practices could be undermining Canadian workers. Do you believe a reevaluation of our trade dynamics is necessary?
**Chrystia Freeland:** Absolutely. The notion that free trade must be fair is essential. We should always strive for agreements that benefit all parties involved. I stand firmly with Premier Ford in advocating for fairness in trade practices, and I share his concerns about the potential negative impacts on Canadian workers.
**Interviewer:** with the recent interest from companies like BYD in establishing manufacturing in Mexico, how do you propose Canada and the U.S. address this challenge while still promoting economic growth?
**Chrystia Freeland:** We must carefully weigh the benefits of economic growth against the risks posed by unfair competition. A multi-faceted strategy is necessary, which includes reinforcing our trade agreements, improving our manufacturing capabilities, and ensuring that we work together with Mexico to align our policies more closely regarding trade with China. Collaboration is key to protecting our interests while fostering a vibrant North American economy.
**Interviewer:** Thank you, Deputy Prime Minister Freeland, for your insights on this critical issue.
**Chrystia Freeland:** Thank you for the opportunity to discuss this important topic.
