Canada could throw Mexico under the bus to try and avoid a second Donald Trump term filled with tariffs.
Driving the news: Canada’s deputy prime minister said she shares Trump’s concerns China could be using Mexico as a route to circumvent tariffs and get cheap auto imports into North America. It’s a sign the feds are open to icing Mexico out of future continental trade deals.
- The comments come as Canada tries to stay on Trump’s good side ahead of renegotiating the Canada-United States-Mexico Agreement (CUSMA) in 2026.
- Ontario Premier Doug Ford was the first major Canadian politician to suggest removing Mexico from the deal. Alberta Premier Danielle Smith seconded the idea.
Why it matters: Ruining the promising Canada-Mexico trade relationship may be worth it to keep things peachy with the U.S. as 75% of Canadian exports go to the U.S. If Canada becomes subject to Trump’s plan for a baseline 10% tariff on imports, it could clip 5% from the GDP.
Yes, but: This strategy could backfire if Mexico can position Canada as the weak link. Such a scenario happened during the first CUSMA negotiations, where Mexico and the Trump administration reached a bilateral deal without Canada, which Canada had to join later.—QH