Chris Young/The Canadian Press/AP
Mexico and Canada Face heightened Stakes in Trade Negotiations Amidst US Tariff Threats
As the deadline for potential U.S. tariffs approaches, Mexico and Canada, America’s primary trading partners, have yet to finalize a framework agreement. This delay is attributed, in part, to the notable economic dependence of both nations on exports to the United States, making the stakes considerably higher compared to countries like China or Japan. Furthermore, the deep integration of Canadian and Mexican companies within American supply chains introduces a layer of complexity to the ongoing negotiations.
both Mexico and Canada possess a crucial fallback option: the United States-Mexico-Canada Agreement (USMCA), a trade pact negotiated during President Trump’s first term. To date, the current governance has maintained exemptions from tariffs for Mexican and Canadian goods that adhere to the USMCA’s established rules. Canadian businesses, in particular, are actively pursuing USMCA certification. Consequently, even if no tariff agreement is reached by the impending Friday deadline, both nations may experience the imposition of the president’s threatened tariffs. Though, according to Dr.Zhang,the practical impact on the ground might be minimal,as existing trade arrangements under the USMCA could largely mitigate the immediate effects.
