Politicians and auto industry groups in the U.S. and Canada have upped their criticism of Mexico, expressing concern that the country is becoming a haven for Chinese automakers trying to circumvent North American tariffs on its products.
Ontario Premier Doug Ford suggested this month that Mexico be kicked out of the Canada-United States-Mexico-Agreement (CUSMA), the trilateral trade agreement that will be up for review in 2026.
Ford said that Mexico has become a “back door” for Chinese auto part makers and car manufacturers, amid a growing perception that Mexico is allowing Chinese manufacturers to set up shop on its shores to circumvent strict tariffs imposed by the U.S. and Canada.
The U.S. and Canada penalized Chinese electric vehicles, steel and aluminum this year in a bid to combat Chinese overcapacity and shore up domestic manufacturing. Some have criticized Mexico for not matching the tariffs in solidarity with its North American trade partners, and U.S. president-elect Donald Trump has threatened to slap Mexico with additional tariffs. Mexican officials have warned that the country would retaliate.
Ford’s claim about Mexico is “making the rounds in Washington, and has been for some time, that the Chinese have redoubled their efforts to find a way into North America, and they’re looking at all of the opportunities [to do so],” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, during a recent interview on CBC’s Metro Morning.
Trump has promised a 10 per cent tariff on all imported goods and has indicated that his administration will renegotiate the terms of CUSMA (also known as USMCA). Trump has accused China of bypassing the agreement by importing car parts into the North American market via Mexico.
There was a 60 per cent surge in shipping container exports from China to Mexico in January 2024 from the same time last year, according to an analysis by shipping intelligence firm Xeneta, with the author suggesting the possibility that China is using Mexico to circumvent tariffs by the U.S.
Alberta Premier Danielle Smith and Ontario Premier Doug Ford have both said Mexico should be cut out of the North American trade agreement and Canada should sign a bilateral deal with the U.S., proposals that would curry favour with U.S. president-elect Donald Trump.
How the so-called ‘backdoor’ works
In the U.S., the Trump and Biden administrations have “used protectionism as a way to kind of make sure that the investments in electric vehicles particularly, and automotive plants especially, don’t get eroded by this idea of a back door,” said Dimitry Anastakis, a professor of Canadian business history at the University of Toronto.
How does that back door work? Tariffs apply to exports (for example, cars that are built in China and then shipped to North America)….
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