As President-elect Donald Trump prepares to reassert his influence over America’s trade policy, Canada and Mexico are already engaging in a fierce competition for favor. With Trump’s promises to prioritize American interests, both nations, as the U.S.’s closest trading partners, are positioning themselves strategically ahead of the new administration’s potential policy changes.
Trump has been clear about his intentions to overhaul trade agreements and place a 25 percent tariff on imports from both Canada and Mexico. The rationale behind this is to address the challenges posed by illegal immigration, drug trafficking, and unfair trade practices. For Canada and Mexico, this shift signals not only a potential economic challenge but also a diplomatic one, as both countries scramble to secure their place in Trump’s North American vision.
Already, the rhetoric between the two neighbors has heated up. Canadian officials have voiced their concerns about the proposed tariffs, warning that retaliation could follow. Canadian Prime Minister Justin Trudeau, for example, met with Trump at Mar-a-Lago shortly after the election, though no firm agreements were made on trade. The discussions reportedly focused on clarifying the differences between Canada’s northern border and Mexico’s southern one, with Canada emphasizing its role as a reliable and peaceful neighbor. “We should not confuse the Southern border with the Northern border,” Canadian Industry Minister François-Philippe Champagne stated, echoing Trudeau’s diplomatic tone.
However, the rivalry between Canada and Mexico over trade is escalating. Mexican President Claudia Sheinbaum has made it clear that Mexico expects respect from its trading partners, including the U.S. In a pointed remark, Sheinbaum even suggested that Canada could only “wish they had the cultural riches” that Mexico offers, a thinly veiled jab at Canada’s perceived advantage in U.S.-Mexico relations. At the same time, Sheinbaum has echoed Trump’s concerns about drug trafficking, noting that Mexico is committed to curbing fentanyl smuggling into the U.S.
Meanwhile, Canadian leaders are grappling with how best to respond to Trump’s protectionist stance. Candace Laing, the Canadian Chamber of Commerce’s president, attacked Trump’s tariff threat, warning that it would turn the U.S.-Canada relationship into a win-lose scenario, with Canada on the losing end. “Being the U.S.’s ‘nice neighbor’ will not make any progress for us in this situation,” Laing remarked, urging Canada to stand firm and rethink its diplomatic approach.
Canadian economists, like Trevor Tombe, have suggested that Canada is likely to retaliate if the tariffs are imposed, but that it will do so in coordination with other nations to maximize the economic impact. As Tombe pointed out, a unilateral response from Canada alone may not be enough to shift the balance, but collaborating with allies could make a substantial difference in the U.S. economy. Canada’s ability to work with other countries to challenge Trump’s tariffs could set the stage for a more aggressive trade policy.
In the end, the standoff between Canada and Mexico underscores the changing dynamics of North American trade under Trump’s leadership. While both countries have long enjoyed close relationships with the U.S., the coming years will test whether these partnerships can evolve or if they will buckle under the weight of shifting American priorities. As Trump takes office, it’s clear that North America’s trade future will not be business as usual.