Canada’s trade alliance with the US is under threat as Chinese goods flood North American markets through Mexico.
At a Glance
- Ontario Premier Doug Ford proposes excluding Mexico from North American trade deal
- Concerns arise over Mexico’s role in facilitating Chinese imports into North America
- Canada aligns with US on imposing tariffs on Chinese goods, unlike Mexico
- USMCA review in 2026 could lead to significant changes in North American trade relations
- Canadian leaders divided on approach to addressing trade concerns with Mexico
Ford’s Bold Move: Proposing a Canada-US Bilateral Trade Agreement
Ontario Premier Doug Ford has ignited a firestorm in North American trade relations by advocating for a bilateral trade agreement between Canada and the United States, effectively pushing to exclude Mexico from the current trilateral deal. Ford’s proposal stems from growing concerns about Mexico’s role in allowing Chinese products to circumvent high tariffs imposed by US and Canadian authorities.
Ford’s stance has gained traction among Canadian provincial and territorial leaders. He claims to have secured their support for separate bilateral deals with the US and Mexico. This move signals a significant shift in Canada’s approach to continental trade and highlights the mounting frustration with perceived loopholes in the current US-Mexico-Canada Agreement (USMCA).
It's exciting that this idea has gone mainstream so fast. Canada will be able to get a way better deal with a bilateral trade agreement with JUST the US. NAFTA was an experiment that hasn't aged well. Canada's economic interests cannot be tied to an unreliable ally like Mexico. https://t.co/P5bkpeQRR4
— J.J. McCullough (@JJ_McCullough) November 20, 2024
Canada’s Alignment with US Trade Policies
Deputy Prime Minister Chrystia Freeland has voiced Canada’s alignment with US concerns regarding unfair Chinese trade practices. Unlike Mexico, Canada has taken decisive action by imposing substantial tariffs on Chinese imports, including a 100% tariff on Chinese-made electric vehicles and a 25% tariff on Chinese steel and aluminum.
“We are perfectly aligned with the United States and that means we are not a back door to unfair Chinese traded goods. The same cannot be said about Mexico,” said Freeland.
This alignment underscores Canada’s commitment to protecting its industrial sectors and jobs from what it perceives as China’s intentional overcapacity and unfair trade practices. The stark contrast between Canada’s and Mexico’s approaches to Chinese imports has become a focal point in the ongoing trade discussions.
The Looming 2026 USMCA Review
As the United States, Mexico, and Canada prepare for the 2026 review of the USMCA, tensions are rising. The review could potentially lead to a renegotiation of the agreement, with the US potentially withholding renewal approval to push for changes on issues such as automotive rules of origin, forced labor import prohibitions, and restrictions on Chinese companies.
The review process lacks a detailed procedure, and any amendments would require written approval from all parties. This uncertainty has led Canada and Mexico to adopt defensive strategies to maintain market access and investor confidence. However, the divergence in approaches between Canada and Mexico regarding Chinese imports could complicate negotiations and potentially fracture the trilateral agreement.
