A surprise consequence of the United States’ aggressive use of tariffs is that they are inadvertently driving Canada, Mexico, and China closer together in terms of trade and politics.
Initially designed to protect domestic industries and reduce trade deficits, these economic measures have had far-reaching consequences. By imposing tariffs on goods from these nations, the U.S. has inadvertently created new opportunities for its rivals to forge stronger economic ties with each other.
Canada and Mexico are diversifying their trade relationships as a response to the tariffs imposed by the U.S. Canadian agricultural exports to China have surged, while Mexico has positioned itself as a key player in the global supply chain, welcoming increased investment from Chinese manufacturers seeking to bypass U.S. tariffs.
Meanwhile, Canada and Mexico have deepened their bilateral trade relationship by strengthening agreements under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This move signifies a reduced dependency on the United States and an increasing willingness to collaborate with China, which could have long-term geopolitical ramifications.
As trade among these nations expands, so do opportunities for illicit activities, including the smuggling of precursor chemicals used to manufacture fentanyl. The U.S. opioid crisis is thus exacerbated by its own economic policies.
China has seized this opportunity to bolster diplomatic ties with Canada and Mexico through investments, trade agreements, and infrastructure development. For Canada, increased economic reliance on China may translate into policy decisions more aligned with Beijing’s interests than Washington’s. Mexico, on the other hand, has already shown signs of growing diplomatic independence.
The unintended consequences of U.S. tariffs are thus strengthening its rivals at America’s expense. By imposing protectionist policies, the U.S. may ultimately lose influence in the global economy and create new challenges for itself.
Source: Calgary Herald
