As United States President Donald Trump’s sweeping 25 percent tariffs on imports from Mexico and Canada were about to kick in, Canadian Prime Minister Justin Trudeau was quick to hit back.
In a news conference on Monday night, he referred to Trump as “Donald”, called the tariffs a “very dumb thing to do”, accused the US president of trying to cripple the Canadian economy to annex the country and imposed immediate retaliatory tariffs.
By contrast, Mexican President Claudia Sheinbaum was silent on Monday night. She responded in a news conference on Tuesday morning, promising to defend Mexican interests and announcing tariffs on US imports. But unlike Canada, Mexico’s tit-for-tat tariffs will come into effect only on Sunday, giving it time to strike a deal with the US.
On Thursday, Sheinbaum is expected to speak with Trump to try to stitch together a compromise even as the US president’s public spat with Trudeau intensifies.
So why is Mexico’s president approaching Trump’s tariffs so differently from how Canada and Trudeau are handling them? How is Mexico responding to Sheinbaum’s strategy? How did we get here? And what’s at stake?
What are Trump’s tariffs, and what’s his justification?
Even before he was sworn into office for a second time in January, Trump announced he would impose 25 percent tariffs on all goods from Canada and Mexico, citing concerns over border security and drug trafficking, particularly the flow of fentanyl into the US.
The US is the second largest goods trader in the world after China, and Trump’s tariffs have rattled global markets.
These tariffs were initially scheduled to take effect on February 4, but negotiations between Trump and the leaders of Canada and Mexico resulted in the US postponing their imposition for a month.
In those negotiations, Trudeau and Sheinbaum agreed to boost border security to prevent drug trafficking and the entry of migrants into the US.
Trudeau appointed a “fentanyl czar” to tackle that issue. Sheinbaum deployed 10,000 additional soldiers to the US-Mexico border to help curb irregular immigration. Within Mexico, her law enforcement agencies busted fentanyl gangs, raided labs and made arrests. Last week, Mexico sent 29 drug cartel leaders to the US for prosecution.
Still, on Tuesday, Trump enforced the 25 percent tariffs, affecting a wide array of goods. Additional tariffs were also imposed on China.
The US’s top three trading partners – Mexico, Canada and China – account for more than 35 percent of the goods that the world’s largest economy imports or exports.
How did Canada respond?
Canada responded promptly and assertively to the US tariffs with retaliatory protectionist measures of its own that it had first announced on February 1.
Starting on Tuesday, Canada imposed 25 percent tariffs on $21bn worth of US goods with the threat of tariffs on another estimated $87bn later if the dispute lasts.
Trudeau warned that Canada “will not back down from a fight” and tariffs would remain in place until the US tariffs are withdrawn.
Products including, meats, grains, certain alcohol, clothes, footwear, motorcycles and cosmetics are just some of the US goods that will be subject to immediate tariffs, according to Canada’s Department of Finance.
Some Canadian provinces have taken steps of their own, ordering the removal of all US liquor from stores, for instance.
Trudeau, in comments on Tuesday, also seemed to back Canadians who are choosing to boycott American goods and boo the US national anthem at sports events.
Trudeau had a call with Trump on Wednesday, but while the US president said it ended on a “somewhat ‘friendly’” note, he subsequently accused Canada of allowing fentanyl to enter the US — even though experts said only a minuscule amount of the opioid comes into the US across its northern border.
How has Mexico responded?
While Trump and Trudeau have exchanged heated personal remarks in recent weeks, Sheinbaum has taken a more measured approach.
In her comments on Tuesday, Sheinbaum expressed the intention to implement “tariff and non-tariff measures” to safeguard Mexico’s interests but refrained from immediate action, suggesting she intends to exhaust all diplomatic channels first.
“What I can tell you is that this is a very definitive moment for Mexico. … There is not going to be submission. Mexico is a great country, and Mexicans are brave and resistant,” she said.
If the tariffs continue, Mexico “will reach out to Canada and other nations”, Sheinbaum said. She added that Mexico may look for other trading partners besides the US and could shift trade alliances “if necessary”.
What’s behind Sheinbaum’s relatively measured approach?
At a briefing with reporters in early February, Sheinbaum offered insights into her mindset, saying that amid threats from Trump, Mexico needed to keep a “cool head”.
This cautious strategy reflects Mexico’s heavy reliance on the US as a market: More than 75 percent of Mexico’s exports go to its northern neighbour, so any dramatic disruption in that equation could bleed the country’s economy. Last year, the US imported $505.8bn in goods from Mexico and exported $334bn, resulting in a trade deficit of $171.8bn.
To be sure, Canada also needs the US for its exports: More than 70 percent of Canadian exports go to the US.
But the context of Trump’s tariffs on Mexico and Canada is quite different, Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada, told Al Jazeera.
While Trump in the past has mooted the idea of bombing Mexico’s drug cartels, many of which his administration has designated as “terrorist” organisations, he has been much more direct in seeking Canada’s territory.
Trump has frequently said his northern neighbour should become the 51st US state and has repeatedly referred to Trudeau, including after their call on Wednesday, as governor rather than prime minister.
“In Canada’s case, Trudeau noted that Trump’s actions are aimed at crippling the Canadian economy to pave the way for an eventual annexation, which goes beyond a mere trade war,” Nadjibulla said, referring to Trump’s repeated threats to absorb Canada.
“It’s an existential fight for Canada’s sovereignty, so there’s a strong incentive to push back immediately and forcefully,” she said.
Commenting on the new tariffs, Trudeau on Tuesday said Trump was planning to cause the “total collapse of the Canadian economy because that will make it easier to annex us”.
“Retaliation here isn’t just about tit-for-tat tariffs. It’s about defending the country’s independence,” Nadjibulla said.
Meanwhile, Trump has said he respects Sheinbaum, something that the Mexican president has referred to while saying she too respects the US president.
Sheinbaum also has something that Trudeau does not: time.
Canada is fast approaching national elections, and Trudeau’s Liberal Party is playing catch-up. After trailing the opposition Conservative Party by double digits for more than a year, the country’s ruling party has started to rapidly close the gap as Trudeau pushes back against Trump’s moves and the US president’s steps stoke a wave of patriotism among Canadians.
Sheinbaum, on the other hand, took office only in October and is wildly popular. In two polls in February, her approval rating was 80 percent and 85 percent.
Is Sheinbaum’s approach working?
It’s too early to say.
But on Wednesday, the Trump administration exempted auto manufacturers from the 25 percent tariffs for a month. While the sector’s supply chains are spread across North America, Mexico is the biggest beneficiary of the reprieve. Cars, trucks, other vehicles and auto parts constitute 27 percent of its exports to the US. For Canada, that figure stands at 13 percent.
And Sheinbaum enjoys more than just popular support in Mexico. Her approach to Trump and his tariffs appears to have the trust of Mexican investors too.
The IPC, the main index of the country’s stock exchange, is up 6 percent from the start of the year. By contrast, the S&P/TSX, the benchmark Canadian stock exchange index, is almost where it was at the start of the year.
What’s next?
If the tariffs and the retaliatory steps taken by the US neighbours stay in place, businesses exporting goods and services as well as consumers will pay higher prices. A potential recession in some or all three North American countries is a possibility.
As tensions simmer, there are signs that the US administration may consider modifying its position. Reports out of the US suggest Trump is open to lowering the 25 percent tariffs on goods from Canada and Mexico.
But if Trump decides to de-escalate, Nadjibulla said, “the damage to trust is already substantial.”
“We’ve seen him threaten new tariffs in April and continue to shift targets. That level of unpredictability erodes confidence among allies and trading partners,” she said.
The tariffs could also affect negotiations on renewing the United States-Mexico-Canada Agreement (USMCA), a free trade pact that came into effect in 2020, was negotiated by Trump’s team during his first term and replaced the North American Free Trade Agreement of 1994. A review of the USMCA is due in 2026, but the tariffs could see talks take place sooner.
“How do you negotiate a stable agreement when one party is consistently changing the rules or imposing new tariffs without warning?” Nadjibulla asked.
“Even if some tariffs get lifted or eased, the bigger issue is that Canada and others now view the US as a less reliable trade partner,” she added.
