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Ontario Premier Doug Ford speaks during a press conference in Toronto, Canada, on May 30, 2024.
Three amigos, or two?
Ford called on Mexico to match Canadian and American tariffs on Chinese imports to stop it being a “backdoor for Chinese cars, auto parts, and other products."
Ford’s province depends on the CA$11.6 billion auto industry, with integrated supply chains across the border. Any threat to that could cause an economic meltdown.
During the negotiations of the new NAFTA — the United States-Mexico-Canada Agreement — in 2019, some Conservative critics of Justin Trudeau’s government faulted the Canadians for making common cause with Mexico in resisting US demands. They are getting an early start this time ahead of the deal’s review in 2026.
“If Mexico won’t fight transshipment by, at the very least, matching Canadian and American tariffs on Chinese imports, they shouldn’t have a seat at the table or enjoy access to the largest economy in the world,” Ford said.
Deputy Prime Minister Chrystia Freeland, who played the pivotal role in negotiating USMCA withUS Trade Representative Robert Lighthizer, has repeatedly emphasized that Canada and the United States are in lockstep on tariffs on China.
Graeme Thompson, a senior analyst with Eurasia Group's global macro-geopolitics practice, says it is hard to know if they will remain in lockstep if Donald Trump’s tariffs on China get too high.
“Given Canada’s dependence on the US market, I think Ottawa will be tempted to do things that only a few years ago would have seemed impossible – including imposing significant new tariffs on China and abandoning Mexico if necessary to preserve its trade and security relationships with Washington.”
Lighthizer, who is expected to return to his job under Trump 2.0, is laying the groundwork for a new tariff policy that would include a 20% tariff on all goods coming into the US.
If there is no exemption for Canada, the policy would also lead to a sudden and dramatic slowdown in the Canadian economy.
Expect the Canadians to remind the Americans that Canada exported $124 billion of oil to the United States last year. Any new tariffs on that trade would increase prices at the pump for Americans, which Trump’s party would pay for in the 2026 midterms.
President Joe Biden walks along the border fence during his visit to the US-Mexico border in El Paso, Texas.
What We’re Watching: Biden at the border, Three Amigos Summit, China’s reopening
Biden goes to El Paso
President Joe Biden on Sunday visited the US-Mexico border for the first time since taking office and at a time when he's getting flak from all sides for his immigration policies. Biden did the usual stuff: He toured a busy port of entry, walked along the border fence, and met with officials like Texas Gov. Greg Abbott, who chided the president for taking so long to show up — feeding into the Republican narrative that blames Biden for the surge of migrant arrivals in recent months. But the president has also upset the left wing of his Democratic Party after failing to deliver on many of his promises to undo the Trump administration's harshest immigration curbs — especially by being wishy-washy on ending Title 42, a Trump-era rule that allows US authorities to expel asylum-seekers on public health grounds that the Supreme Court is now sitting on. What's more, last week Biden announced that migrants from Haiti, Cuba, Nicaragua, and Venezuela would be required to apply from outside the US and be punished if they don't. While the president is otherwise benefiting from the GOP's civil war in Congress, his immigration headache won't go away anytime soon.
Biden, AMLO & Trudeau meet in Mexico City
After his border visit, Biden will travel to Mexico City on Monday for the annual meeting of North American leaders known as the "Three Amigos Summit." Of course, there’s an immigration angle: Biden hopes to get buy-in from Mexico's President Andrés Manuel López Obrador, known as AMLO, for his “safe third country” policy for asylum-seekers who enter the US through Mexico. Under the scheme, first floated by the Trump administration in 2019, the US would automatically deny asylum to migrants who haven't applied for the same status first in Mexico. That's a non-starter for AMLO because Mexico can hardly protect foreigners from gang violence while its own citizens are fleeing similar violence from drug cartels, as seen by the bloodbath following the arrest of Ovidio Guzmán, son of "El Chapo.” Biden and AMLO will also discuss the surge of fentanyl flowing into the US from Mexico, with the DEA having seized enough pills last year to kill every single American. Finally, Biden and AMLO, along with Canadian PM Justin Trudeau, will attempt to make progress on multiple USMCA trade disputes like GMO corn or rules of origin in the US auto industry.