Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum are urging continued dialogue and cooperation in response to U.S. President-elect Donald Trump’s threat to impose 25% tariffs on both nations when he assumes office next year.
During a press conference on Tuesday, Sheinbaum expressed concern over the potential economic fallout, warning that tariffs would lead to inflation, job losses, and disrupt business relationships between the countries. She planned to send Trump a letter emphasizing the importance of working together to address shared challenges. “One tariff will lead to another and so on, until we jeopardize our common businesses,” Sheinbaum said.
Trump announced his tariff plan via social media on Monday night, stating he would impose a 25% tariff on all products coming from Mexico and Canada into the United States. He linked the tariff to issues such as drug trafficking, particularly fentanyl, and illegal immigration. “This Tariff will remain in effect until drugs, particularly fentanyl, and all illegal aliens stop invading our country,” Trump wrote. He also signaled his intention to impose a further 10% tariff on China, America’s biggest global competitor.
Trump’s policy stance has been a recurring theme throughout his 2024 campaign, with his supporters arguing that tariffs are essential to bringing manufacturing jobs back to the U.S. However, economic experts have warned that the tariffs would likely raise costs for American consumers.
In response, Trudeau revealed he had spoken with Trump on Monday evening, following the president-elect’s online remarks. Trudeau emphasized the long-standing relationship between the two countries and expressed a willingness to collaborate on mutual challenges. “We discussed the challenges we can address together. It was a positive conversation,” Trudeau said. He also added that maintaining the U.S.-Canada relationship would require continued effort and cooperation.
As the Canadian federal government faces pressure, particularly from conservative politicians, to address potential trade disruptions, right-wing Ontario Premier Doug Ford urged the government to take the border situation seriously. “The federal government needs to take the situation at our border seriously,” Ford posted on social media.
Danielle Smith, Premier of Alberta, echoed Ford’s concerns, stating that Trump’s remarks on the U.S.-Canada border were valid. As a major energy exporter, Smith emphasized the need for the U.S. and Canada to work together on energy security.
Trudeau mentioned that he had also spoken with Quebec Premier François Legault and planned to meet with provincial leaders to discuss the potential impact of the U.S. policies. “There’s work to do, but we know how to do it,” Trudeau remarked.
The U.S. and Canada are each other’s largest trading partners, with nearly $2.7 billion in goods and services exchanged daily across the border. The trade relationship with Mexico is similarly significant, with U.S. goods and services trade with Mexico totaling an estimated $855 billion in 2022.
The three nations, bound by the United States-Mexico-Canada Agreement (USMCA), signed in 2020 under Trump’s presidency, replaced the North American Free Trade Agreement (NAFTA). The USMCA was designed to facilitate trade and cooperation among the three countries, and any shifts in trade policy could have far-reaching consequences.
Following Trump’s comments, the Mexican peso fell 1.3% in early trading on Tuesday, reflecting the market’s concerns over potential trade disruptions.
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