President-elect Donald J. Trump’s proposed 25% tariffs on imports from Canada and Mexico have exposed a rift between the two countries, potentially playing into a divide-and-conquer strategy. While Mexico has taken a defiant stance, threatening retaliatory tariffs on U.S. goods, Canada has sought to align itself closely with the United States, emphasizing its unique strengths over Mexico.
For decades, the trade agreement among the U.S., Canada and Mexico has balanced mutual interests. However, Trump’s aggressive approach to migration and trade has raised the possibility of dissolving the trilateral arrangement in favor of bilateral deals. Canadian Prime Minister Justin Trudeau has highlighted the shared economic ties between Canada and the U.S., particularly in terms of border security, trade with China, and job markets.
“Rather than panicking, we’re engaging in constructive ways to protect Canadian jobs,” Trudeau assured Parliament, underscoring his intention to maintain a collaborative relationship with the U.S. Canadian officials, meanwhile, have used private discussions with U.S. Republicans to draw contrasts with Mexico on critical issues like China trade and undocumented migration.
Mexico Responds with Defiance
Mexican President Claudia Sheinbaum, however, has focused on defending her country’s trade relationship with the U.S. She dismissed Canada’s attempts to portray itself as a better partner, suggesting such posturing was politically motivated. In response to Canadian claims, Sheinbaum pointed to Canada’s growing imports of Chinese electric vehicles, which reached $1.6 billion in 2023, far exceeding Mexico’s.
Sheinbaum also emphasized Mexico’s role as the largest importer of U.S. agricultural products and its position as the top supplier of imports to the United States. Leveraging her strong domestic support, she has remained firm in protecting Mexico’s trade interests, vowing to maintain a constructive dialogue with both the U.S. and Canada.
Despite Trudeau’s assurances that he values the trilateral relationship, Sheinbaum suggested that Mexico’s economic strength positions it as a crucial player in any future negotiations. “Mexico’s importance to the U.S. economy cannot be overstated,” she said.
A Familiar Trade Tension
Observers have drawn parallels between the current tension and the renegotiation of the United States-Mexico-Canada Agreement (USMCA) during Trump’s first presidency. At that time, Canada and Mexico coordinated closely to resist Trump’s tariffs, eventually agreeing to a unified trade overhaul in 2020.
However, Canada’s current strategy of distancing itself from Mexico has drawn criticism. “They’re trying to play Trump’s game, but the political bet they’ve made hasn’t paid off,” said Diego Marroquín Bitar, a North American trade expert. He noted that Mexico now surpasses Canada as the U.S.’s top import supplier, further shifting trade dynamics in its favor.
As North America’s trade landscape continues to evolve, the fallout from Trump’s tariff threats underscores a deeper challenge: whether Canada and Mexico can present a united front or risk being pitted against each other in the high-stakes world of international trade.
