The US is using trade policy to advance economic security priorities with Canada and Mexico, focusing on limiting Chinese supply chain inputs.
Key facts
- •The US has declined to renew the US-Mexico-Canada Agreement, triggering a review process.
- •The US is focusing on limiting Chinese supply chain inputs by embedding economic security principles into the trade agreement.
- •The US has two cards to achieve its objectives: a standing veto point every six years and an annual pressure campaign.
- •Chinese investments in Mexico have been stalled or canceled pending the review.
- •The US is seeking to incorporate provisions like investment screening, export controls, and technology policy into the agreement.
The US has declined to renew the US-Mexico-Canada Agreement, triggering a review process that creates a recurring mechanism for leverage. The Trump administration's decision is the latest example of using trade policy to advance broader economic security priorities. The US is focusing on limiting Chinese supply chain inputs by embedding economic security principles into the continent's trade architecture.
By the numbers
Economic Security Provisions
The US is seeking to incorporate provisions like investment screening, export controls, and technology policy into the agreement. This approach would make the provisions more durable than tariffs or executive actions. The US has two cards to achieve its objectives: a standing veto point every six years and an annual pressure campaign until its neighbors concede or the treaty expires.
Negotiations and Pressure
Sources describe a negotiating agenda centered on economic security provisions alongside traditional trade grievances. The pressure is already shaping government policy, with Chinese investments in Mexico being stalled or canceled pending the review. Ongoing talks with the US include supply chain resiliency measures in key sectors.
US Policy and Objectives
The White House's demands do not break with past US policy, as Washington has been moving to strengthen North America's collective resilience against geopolitical shocks. The Biden administration has pursued deeper trilateral economic integration with Canada and Mexico in strategic sectors. The question now is how much further Canada and Mexico are willing and able to venture under Washington's evolving economic security agenda.
Timeline
- 2023North American Ministerial Committee on Economic Competitiveness initiatives
- 2024Canada adopted 100 percent tariffs on Chinese electric vehicles
- 2025Mexico raised tariffs on Chinese imports
- July 1US declined to renew the US-Mexico-Canada Agreement
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by War on the Rocks.
