Mexico and Canada are vying for President-elect Trump's support ahead of his Jan. 20 inauguration, each seeking to assert itself as the more important North American ally.
But Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum are both in direct conflict between two $2 trillion economic powerhouses that are closely tied to and forced to negotiate with $30 trillion of giant corporations. He is doing shadow boxing to get rid of it.
“When you talk to Mexicans and Canadians, they each think they need to be in a position to work with and negotiate with the United States. That's not a position they have at the moment, but they are willing to move in that direction. ,” said Earl Anthony Wayne, former U.S. ambassador to Mexico and co-chair of the Wilson Center Mexico Institute Advisory Board. .
“It's a little bit harder to deal with people who aren't in government yet, but they need to get there. And I think from their perspective that's a much smarter move. You could argue which is the wiser move from the US perspective.
President Trump has threatened to impose across-the-board tariffs if his demands are not met, widely seen as pursuing a “divide and conquer” strategy against the two neighbors, who are also the United States' top two trading partners. There is.
Prime Minister Trudeau and Prime Minister Sheinbaum have avoided direct confrontation, but have shown some resentment.
In response to Ontario Premier Doug Ford's statement last month that Mexico has become a “backdoor into the Canadian and U.S. markets for Chinese-made cars, auto parts and other products,” Trudeau said Mexico is He emphasized that he is willing to cooperate with the government. Hopefully, Mexico as well,'' ensuring that China abides by global trade rules.
And Kirsten Hillman, Canada's ambassador to the United States, commented on Trudeau's conversation with President Trump, telling The Associated Press on Sunday that “the message was really understood that our border is very different than the Mexican border.” Ta.
Sheinbaum took offense to the comment and responded, “Mexico deserves to be respected, and even more so by our trading partners.”
“They want the cultural richness of Mexico, of our ancestors, of the indigenous people, to really exist. Mexico has more than 3,000 years of history and a grand pre-Columbian, pre-Hispanic civilization. ” she added at her daily press conference on Monday.
The sniping reflects recognition of the lopsided balance of power between the two countries and the United States and President Trump's desire to exploit it.
Ironically, North American integration was partly conceived as a tool to smooth out that imbalance.
Since the North American Free Trade Agreement (NAFTA) negotiations in the early 1990s, U.S. trade negotiations have focused on first smoothing out asymmetries, or starting negotiations, before diving into the horse-trading that forms the technical aspects of trade. We have aimed to set up a more or less equal field before. trade agreement.
The NAFTA model succeeded in prying open Mexico's previously closed economy, and a decade later, the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA) emphasized regional development over opening important markets to the United States. -DR). products and services.
However, no one expected that discussions of regional development would strike a chord with President Trump.
“Despite the successes, many challenges remain, and with the incoming U.S. administration and the tariff announcements we've just heard in recent weeks, there are some real questions surrounding North American integration. Freedom trade, nearshoring, and, of course, this will take place under the upcoming 2026 USMCA. [United States-Mexico-Canada Agreement] I think over the past few years everyone has been trying to focus on the fact that it's a review, not a renegotiation. And I think that's up in the air,” said Lila Abed, director of the Wilson Center Mexico Institute.
USMCA was created during President Trump's first term as a replacement for NAFTA and included a review provision that would be triggered six years after the agreement's implementation, which was signed in 2020.
However, this review clause is clearly not a sunset clause, but rather an idea proposed by the first Trump administration that would take effect four years after initial ratification. The proposal angered Canadians, Mexicans and Republican business groups, but was ultimately included in the deal as a review clause in 2026 and a harsher sunset clause in 2036.
President Trump's return to Washington has changed the carefully negotiated balance of power in 2026 and put Canada and Mexico on a collision course.
The confusion is driven by political dynamics within Canada, with the Conservatives leading the Liberals by a wide margin in national polls ahead of the 2025 election.
Tory leader Pierre Poièvre is taking a page from Trump's campaign playbook and pushing aside the concept of North American regionalism, arguing that “everything has fallen apart” under Trudeau.
“Canada comes first,” Poièvre told reporters on Nov. 26 in response to a question about the idea of Canada signing a separate bilateral agreement with the United States and sidelining Mexico.
“Let's put it this way: First, I only care about Canada. I want to put our country first. Second, the United States accounts for over 60 percent of our trade. We trade more with the United States than we do with the rest of the world combined. I will do what it takes to preserve and protect that relationship above all else.”
Both Mr. Sheinbaum and Mr. Trudeau are fighting for a domestic audience, but the difference is that he has the political upper hand while she is in a landslide with approval ratings hovering around 70 per cent. He had just won a major victory.
Political squabbles aside, trade deals are built with significant input from the private sector.
“There's a big difference between what Canada's private sector thinks about the USMCA and what some politicians are saying out loud about the USMCA, and Mexico and Canada have been in the same position before. This is the first time. “In 2018, I don't think the divide-and-conquer strategy worked,” said Diego Marroquín, a fellow at the Wilson Center for the Mexican Institute and the Canadian Institute.
“And I hope that doesn't work out now, because like I said, we're stronger together and for two small parties, we've had some successful rebalancing of parties. Because it makes much more sense to work together to make the agreement a concession. ”
At some point in 2018, Canadaremoved from negotiationswhich suggested the United States and Mexico were close to a deal, but ultimately all three parties came to the table.
U.S. interests could also be better served by a functioning tripartite agreement, apart from the fact that Mexico and Canada are the largest export markets for the United States.
President Trump could face internal pressure to soften hostility, particularly from border states that rely heavily on USMCA exports.
“Trade with Mexico and Canada supports millions of jobs in Texas, and if President Trump gets serious about starting a trade war with our allies, his administration will be putting those jobs at risk. “It will be,” said Rep. Joaquin Castro (D-Texas).
Canada is a major oil producer, NATO colleague, and strategic ally in the Arctic. The U.S.-Canada relationship has geopolitical implications that extend beyond trade.
And Mexico will not be able to meet its immigration and security goals or continue to grow as a market for U.S. goods and services unless its economy grows.
“If I had a chance to talk to President Trump about energy, the first thing I would tell him would be that we have a very interdependent energy relationship with Mexico. It's a source of great prosperity. “America's resilience and energy security'' said David Goldwyn, an international energy consultant.
“The second thing I would say to him is that energy is really essential to Mexico's prosperity, and Mexico's prosperity is important to our national security. We need economic growth and enough jobs for our people. create an environment with companies that can produce products and supply products to the United States. A prosperous Mexico that produces less immigration pressure, lessens the power of cartels, and increases the amount of trade between the two countries.A wealthy Mexico buys vast amounts of manufactured goods from the United States, but without national income. Because you can't actually do that,” Goldwyn added.
