(Bloomberg) -- Canadian Prime Minister Justin Trudeau said his government has concerns about Mexico’s trade with China as a likely renegotiation of the North American trade agreement looms.
“There are concerns around the level of Chinese investment in Mexico that I think need to be addressed,” Trudeau said at the Asia-Pacific Economic Cooperation summit in Peru on Saturday.
But he called Mexico a “solid partner” during the last round of free trade negotiations, and said he’s hopeful they can work constructively together over the coming months.
The US-Mexico-Canada Agreement was signed in 2018, replacing the North American Free Trade Agreement or NAFTA, and a decision on its renewal is due by July 2026. President-Elect Donald Trump has threatened to open the deal for renegotiation.
Trudeau did not go as far as some provincial leaders — including Ontario Premier Doug Ford and Alberta Premier Danielle Smith — who have said Canada should pursue a bilateral trade deal with the US due to Mexico’s more open trade with China.
“I am hopeful that we’re going to be able to do it within the context of trilateral negotiations, and renew and strengthen NAFTA in ways that works for all three of our countries,” Trudeau said.
Mexico imported worth $121 billion of goods from China 2023, making the country its second-largest trading partner after the US, from which it imported $271 billion that same year, according to data compiled by Bloomberg. Mexico imported $14 billion from Canada.
This summer, Canada followed the Biden administration’s tightening grip on China by announcing a 100% tariff on electric cars and a 25% levy on steel and aluminum from the Asian country.
‘Challenging Consequences’
Trudeau also said that Trump’s return to power “came up a fair bit” in his conversations with world leaders at the APEC summit.
His government expects Trump’s administration “has an approach that is less unknown than it was back in 2016,” but its decisions might still cause “challenging consequences.”
“Trump will be very much focused on what’s good for the US, but because trade can and should fundamentally be a win-win, there are ways to work in serious, frank and open engagements that deliver opportunities for people.”
--With assistance from Brian Platt.
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