Mexico Acknowledges Canada’s Concerns About a Chinese Auto Plant, Says None Exists

Canada’s Prime Minister Justin Trudeau, left, and Mexico’s President Claudia Sheinbaum talk during the G20 Summit leaders meeting in Rio de Janeiro, Monday, Nov. 18, 2024. (AP Photo/Eraldo Peres)

7:51 PM EST, November 21, 2024

MEXICO CITY (AP) — Mexico’s president acknowledged Thursday that Canada is concerned about reports of a Chinese company’s plan to build an auto plant in Mexico, but she said it does not currently exist.

President Claudia Sheinbaum said she talked recently to Canadian Prime Minister Justin Trudeau and that he assured her he did not support excluding Mexico from the U.S.-Mexico-Canada trade agreement.

But Trudeau said later Thursday that while having Mexico in the agreement “is my first choice,” he is “leaving all doors open” on the future of the trilateral trade pact.

“Pending decisions and choices that Mexico has made, we may have to look at other options,” Trudeau said at an appearance in Canada.

On Wednesday, provincial leaders in Canada called on Trudeau to negotiate a bilateral trade deal with the United States that would exclude Mexico.

“The prime minister does not agree with taking Mexico out of the treaty, he told me so clearly,” Sheinbaum said following the bilateral meeting the two leaders held during this week’s G20 summit.

“He asked me about a Chinese company’s auto plant, and if there was a plant in Mexico,” she said, and responded that the company’s only North American plant was in California.

Afraid of losing the US-Canada trade pact, Mexico alters its laws and removes Chinese parts

That was an apparent reference to Chinese carmaker BYD, which had reportedly been planning to build a plant in Mexico but hasn’t done so yet.

Trudeau said “there have been real and genuine concerns raised about Chinese investment into Mexico.”

Politicians in the United States and Canada have expressed concerns that under the U.S.-Mexico-Canada trade agreement, Chinese companies could assemble autos in Mexico and ship them north, avoiding tariffs.

On Wednesday, Doug Ford, the premier of Canada’s most populous province, chaired a phone call with all 13 provincial and territorial premiers and said they want Trudeau to do a straight bilateral trade deal with the U.S., Canada’s top trading partner.

“There’s a clear consensus that everyone agrees that we need a bilateral trade deal with the U.S. and a separate bilateral trade deal with Mexico,” Ford told reporters in Toronto after the call with provincial leaders.

“We know Mexico is bringing in cheap Chinese parts, slapping made in Mexico stickers on, and shipping it up through the U.S. and Canada, causing American jobs to be lost and Canadian jobs. We want fair trade,” he said.

Sheinbaum attributed that call to domestic political jockeying in Canada, saying “they use these issues as part of an electoral campaign.”

There is a Chinese vehicle assembly plant in Mexico, operated by Giant Motors, which assembles JAC brand vehicles, largely from imported parts. But there is no evidence it exports any significant part of its production to the United States or Canada.

On Tuesday, Canada’s Deputy Prime Minister, Chrystia Freeland, said she shares U.S. concerns about Mexico serving as a back door for China to import cheaper goods into the North American market ahead of a review of the U.S.-Mexico-Canada Agreement in 2026.

Freeland said members of the outgoing administration of U.S. President Joe Biden and supporters and advisers of President-elect Trump have expressed “very grave” concerns to her about the issue and Canada shares them.