Deputy Prime Minister Chrystia Freeland expressed concerns about Mexico’s trade policies with China during a meeting of the newly revived cabinet committee on Canada-U.S. relations. Freeland acknowledged the concerns raised by Ontario Premier Doug Ford and U.S. president-elect Donald Trump regarding Chinese companies bypassing trade rules and exporting vehicles through Mexican manufacturing plants. Canada has already imposed tariffs on Chinese imports, but Mexico has not followed suit, prompting calls to exclude Mexico from free trade talks.
Freeland’s remarks align Canada with the U.S. in taking action against Chinese imports, making Canada the only country fully aligned with the U.S. on economic policy towards China. The fear is that Chinese automakers will take advantage of duty-free import rules under CUSMA and flood the North American market with vehicles, circumventing U.S. and Canadian tariffs. This has led to calls for a renegotiation of CUSMA in 2026 to address concerns related to Mexico’s trade practices and Chinese companies operating in the country.
Ford has suggested negotiating a bilateral free trade agreement with Canada if Mexico does not impose tariffs on Chinese imports, in order to protect jobs in Ontario. Trump has threatened to impose tariffs on all Mexican imports if the country does not stop the flow of migrants to the U.S. border. He has also proposed imposing tariffs on vehicles imported from Mexico and on Chinese companies operating in Mexico that bypass CUSMA rules, with potential tariffs as high as 1,000 percent. Mexico has warned of retaliatory tariffs on American imports, which could harm the economies of North America.
Prime Minister Justin Trudeau has alluded to efforts to work with partners like the U.S. and Mexico to protect jobs, environmental concerns, and labor standards. However, Freeland’s comments indicate a stronger stance on aligning with the U.S. against Chinese imports. In response to concerns about Chinese companies building manufacturing plants in Mexico and potentially flooding the market with vehicles, there is a push to ensure that CUSMA rules are not exploited for unfair trade practices. The issue of Mexican trade policies with China is likely to remain a point of contention between the three North American countries in future trade negotiations.
