Trade Tensions Rise: Canada's Concerns Over China's Auto Plan in Mexico

Mexico's President Claudia Sheinbaum addressed Canada's concerns about a potential Chinese auto plant in Mexico. Despite Canadian provincial leaders urging a US-Canada trade deal excluding Mexico, Prime Minister Trudeau reassured Sheinbaum of his support for the current tri-country trade agreement. Concerns persist over China's influence in North America.

In a significant diplomatic exchange, Mexico's President Claudia Sheinbaum has acknowledged Canada's apprehensions surrounding reports of a Chinese auto plant planned in Mexico. This development has cast a shadow over the US-Mexico-Canada trade agreement, although Sheinbaum clarified that the plant does not yet exist.

Amid calls from Canadian provincial leaders for a bilateral trade agreement with the US that excludes Mexico, Sheinbaum emphasized following a conversation with Prime Minister Justin Trudeau at the G20 summit that Trudeau supports the existing tri-national trade deal. Their discussions highlighted the geopolitical nuances influencing North American trade dynamics.

The root of these concerns stems from fears that Chinese companies may be poised to use Mexico as an assembly base to evade tariffs, potentially impacting jobs in the US and Canada. As such, the looming 2026 review of the trade treaty has brought increased scrutiny from policymakers in the region, signaling a potential shift in relations.

(With inputs from agencies.)