US’s neighbors brace for Trump second term after trauma of first

Late last year, President Joe Biden’s administration was facing a border problem — and it wasn’t just on America’s frontier with Mexico.

Thousands of Mexican citizens were taking advantage of visa-free travel to fly to Canada and then try to cross into the U.S. by heading south.

Canadian Prime Minister Justin Trudeau came under pressure from American officials and local politicians to reinstate the visa requirements he ended in 2016. Critics wanted immediate action, but Trudeau’s government moved delicately, taking time to meet with Mexican President Andrés Manuel López Obrador’s administration and in February ultimately reimposing the demand for only about 40% of arrivals.

The careful maneuvering was more than just standard diplomacy. Senior officials in Trudeau’s government worried it would be terrible timing to start a fight with Mexico, according to people familiar with the matter. Within a year, their thinking went, Donald Trump could win another term in the White House, potentially reigniting a continent-wide battle over tariffs and trade. Canada and Mexico would need to present a united front.

In this case, Trudeau appears to have navigated the issue successfully, cutting down on arrivals without tanking relations with Mexico. But the far bigger challenge may still be to come.

As Americans head to the polls in November, concern is building in Ottawa and Mexico City that the next U.S. administration may move to limit trade among the three countries that totaled some $1.5 trillion in goods last year. The United States-Mexico-Canada Agreement — the deal reached in 2018 to replace 1994’s North American Free Trade Agreement — is scheduled for a joint review in 2026, and there is growing speculation the U.S. will push to renegotiate parts of it, especially rules for auto manufacturing and dairy.

Trudeau has launched a strategy geared toward recruiting U.S. allies. He has sent senior Canadian politicians, diplomats and business leaders to meet with U.S. chief executives, lawmakers and governors on the importance of trade, particularly for the automobile and energy industries.

Chinese investment in Mexico looms heavily over its relationship with the U.S., and since December, Mexico has been working on a framework for investment screening around national security to help alleviate American concerns. A particular concern is Chinese companies exporting cars from Mexico into the U.S. The two sides have met several times on the issues, according to a person familiar with the matter.

In both countries, the angst goes beyond Trump — it’s under Biden that the U.S. has been clashing with Canada and Mexico on auto-parts rules. Just last month, Biden unveiled tariffs on about $18 billion of annual imports from China targeting electric vehicles, batteries, chips, solar cells, and critical minerals. That’s in addition to previous increases on steel and aluminum.

But Canadian and Mexican officials say trade negotiations would be vastly more volatile and unpredictable if Trump were at the helm.

Trump has vowed to impose 10% duties on goods from around the world if he wins in November, part of efforts to shore up U.S. manufacturing jobs. He hasn’t explicitly said how that would apply to Canada and Mexico, but Canada’s ambassador to the U.S. has warned about global retaliation.

“A second Trump term is going to be quite different” when it comes to trade, said Laura Dawson, executive director of the Future Borders Coalition, a binational group that promotes Canada-U.S. trade.

She said the “adult supervision” around Trump in his first term — people who were largely supportive of trade — are “few and far between now.”

In an attempt to line up allies on trade, Canadian officials such as Industry Minister Francois-Philippe Champagne travel frequently to the U.S. Those meetings have included chief executives at companies such as Coca-Cola Co., United Parcel Service Inc. and Goodyear Tire &Rubber Co., as well as Washington lawmakers.

In these visits, the Canadians emphasize their country is the top export destination for 35 states. They often travel beyond the Canada border regions to places such as Georgia, South Carolina and Nebraska to emphasize how crucial Canadian trade is to those states’ economies. After all, Canada buys about as much in goods from the U.S. as China, France and Japan combined.

“When I look at people I say, ‘I hope you’re happy to see me because I’m your largest customer by far,’” Champagne said in an interview during a recent trip to New York.

Though Champagne stressed that he meets with a range of people, some are clearly Trump-related figures. That includes Gary Cohn, vice chairman at IBM Corp. and Trump’s former top economic adviser, as well as Republican state governors such as South Carolina’s Henry McMaster.

Canada’s U.S. Ambassador Kirsten Hillman said officials have stayed in contact with people in Trump’s orbit over the past few years, targeting think tanks they believe would be influential if he wins a second term.

“We meet with them often,” Hillman said at an event with the Montreal Council on Foreign Relations. “Not just the management, but also the people who are writing the policies. My team and I, through the embassy, are in continual contact.”

In Mexico, officials working on behalf of President-elect Claudia Sheinbaum, an ally of López Obrador who has pledged continuity with his policies, are creating separate but similar plans for trade negotiations with Trump or Biden, according to a senior adviser.

The country’s top exports include automobiles, chemicals and agriculture products, and the U.S. and Mexico have clashed over rules for energy companies, as well as American corn exports.

Behind closed doors, Mexico’s biggest companies express concern that Trump would link the issues of trade and immigration, as he did in May 2019 and as Biden has worked deliberately not to do, according to a Mexican official, who asked not to be identified.