Canada, Mexico, and the U.S.: Tariff Threats Expose Tensions in North America

The latest threat from Donald Trump to impose a 25% tariff on all goods and services from Canada and Mexico has strained an already tenuous relationship among the three North American neighbors. Framing the issue around migration and the fentanyl crisis, Trump’s proposed tariffs have ignited a fierce diplomatic battle, with Canada and Mexico maneuvering to differentiate their respective positions while maintaining vital trade ties with the U.S.

However, this episode underscores a key challenge for Canada: persuading the U.S. to treat its relationship with Canada as distinct from that with Mexico. The Canadian government must convincingly articulate why Canada’s border dynamics, trade practices, and shared priorities with the U.S. stand apart from the issues dominating the U.S.-Mexico border.

Trump’s announcement on social media, declaring tariffs unless “drugs and illegal aliens stop this invasion of our country,” was met with alarm by both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum. While both leaders recognize the economic devastation these tariffs could cause, their strategies to counter Trump’s narrative reveal cracks in their diplomatic unity.

Canada has focused on highlighting the differences between its border with the U.S. and the southern U.S. border. Immigration Minister Marc Miller pointed out that the 23,000 interceptions at the northern border in 2023 pale in comparison to the 1.5 million encounters at the U.S.-Mexico border last year. Similarly, Canadian officials have emphasized that fentanyl seizures at the northern border are negligible compared to those at the southern border, where U.S. customs agents confiscated over 21,000 pounds of the drug in a single year.

Mexico, however, has pushed back against being scapegoated for U.S. domestic issues. President Sheinbaum, under pressure to demonstrate Mexico’s capability in managing migration and drug trafficking, defended her country’s efforts while criticizing Canada. She pointed to Canada’s own challenges with fentanyl consumption and controversial drug decriminalization policies, claiming Canada had a “very serious problem” with the drug.

Sheinbaum’s pointed remarks about Canada not having Mexico’s “cultural riches” signal an attempt to portray Canada as an opportunistic trading partner. She accused Canada of using Mexico as a political scapegoat, suggesting that Canadian leaders are pandering to domestic audiences by distancing themselves from Mexico.

For Canada, the stakes are clear. Its economic relationship with the U.S. is too significant to risk being lumped into Trump’s sweeping policies aimed at curbing migration and drug smuggling. Trudeau and his administration have openly discussed the possibility of negotiating a bilateral trade deal with the U.S., sidelining Mexico if necessary. However, such a move risks alienating a key regional partner and weakening the collective bargaining power of North America.

Diplomatically, Canada’s ambassador to the U.S., Kirsten Hillman, has reiterated that the Canadian border is vastly different from the Mexican border. This narrative aims to shift U.S. perceptions and ensure that Canada is not unjustly penalized for issues that primarily concern the southern border.

The tensions between Canada and Mexico reflect broader issues in North American diplomacy. Experts have long noted that the Canada-Mexico relationship is the weakest link in the trilateral partnership. The renegotiation of NAFTA into the Canada-U.S.-Mexico Agreement (CUSMA) further exposed this rift, with both countries occasionally prioritizing their bilateral relationships with the U.S. over trilateral cooperation.

Trump’s tariff threat exacerbates these divisions, with his divide-and-conquer strategy potentially reshaping North American trade dynamics. By pitting Canada and Mexico against each other, Trump ensures the U.S. retains a dominant position, forcing its neighbors into reactive stances.

Canada’s priority is clear: it must maintain its close economic ties with the U.S. while preventing Trump’s tariffs from becoming reality. To achieve this, Canada should:

Strengthen Bilateral Messaging: Canadian officials must continue to emphasize the distinct nature of the northern border, showcasing Canada as a reliable partner that does not contribute to the migration and drug issues plaguing the U.S.-Mexico border.

Engage Strategically with Mexico: While Canada may find it tempting to sideline Mexico in trade talks, maintaining regional solidarity is critical. A fractured North America benefits no one except the U.S., which can leverage the division to its advantage.

Push for Evidence-Based Policy: Trump’s tariffs are rooted in sweeping generalizations rather than data. By providing clear evidence of Canada’s contributions to U.S. economic and border security, Canada can undermine the rationale behind the proposed tariffs.

Trump’s tariff threat is a stark reminder of the volatility in North American relations. For Canada, the challenge is to differentiate itself from Mexico without alienating its regional partner. Balancing these competing priorities will require diplomatic finesse and a clear-eyed understanding of the stakes. The message to the U.S. must be unequivocal: Canada is a distinct and dependable ally whose economic and border issues are not comparable to those of Mexico.