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Trump’s trade war gobsmacks Mexico and Canada

“What we are doing is, prepare and keep a strategy of how to coexist with what is sometimes unpredictable. That’s our obligation,” Mexican Foreign Minister Marcelo Ebrard said. | Andrew Harnik/AP Photo

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Mexican and Canadian officials spent two years learning how to navigate a fractious U.S. president. Now they’re deploying those lessons to find a way out of Trump’s latest trade flare-up.

Updated

It was a jubilant day for North America. At least, it looked that way to leaders in Mexico City and Ottawa.

Steel tariffs had just been lifted across the continent. Relieved Canadians had responded by introducing a bill to implement USMCA, the Trump administration’s signature trade deal, and Mexico had just followed suit on Thursday. Vice President Mike Pence was in Ottawa to celebrate the progress and cheer on America’s neighbors.

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Within hours, the moment of continental comity blew up with two tweets from President Donald Trump.

Trump’s sudden declaration of new tariffs on Mexico last Thursday evening delivered immediate whiplash, a jolt for two countries that had — for a moment — thought they might be coming off the Trump roller coaster.

“It’s never over,” said one Canadian official, describing the constant drama of life dealing with Trump.

Officials in Mexico and Canada in recent days kicked into gear with playbooks they’ve each used repeatedly in navigating a fractious relationship with Trump over the past two years. They’re deploying lessons other nations have come to learn as well: stay calm, speak the American president’s language and find Trump-friendly voices who can lean on him to deescalate the tensions.

Trump: Mexico tariffs will 'likely' go into effect

Both countries also have learned to lean on each other with an informal support network to plot strategy and shape a shared action plan to keep Trump’s America First approach from destroying America’s two allies next door.

“What we are doing is, prepare and keep a strategy of how to coexist with what is sometimes unpredictable. That’s our obligation,” Mexican Foreign Minister Marcelo Ebrard said Tuesday.

“It’s impossible for Mexico to control” what unpredictable actions the Trump administration may take in the future, he added, but “we are going to be ready.”

Speaking at a press conference Tuesday in London, Trump said it’s “likely” the 5 percent tariff on all Mexican imports will go into effect June 10, even though U.S. and Mexican officials have not yet had a formal meeting to work on a solution.

Trump officials, including Pence and Secretary of State Mike Pompeo, will meet with Mexican officials on Wednesday at the White House to discuss the situation, including Trump’s demand to prevent migrants from entering the United States from Mexico.

America’s neighbors have tried to project calm, insisting publicly that USMCA remains unaffected by the latest tariff twist.

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Officials have mostly maintained the confident line that the agreement will still be ratified. The more candid ones acknowledge, however, that tensions created by the fresh tariffs could stall ratification.

“In Mexico, we’re going to continue” with USMCA, Mexico’s Undersecretary for North America Jesús Seade said Tuesday. “In the United States, I don’t know what they can do” with the tariffs threat right now. The new pact “is a little in waiting,” he added.

Current and former Mexican officials said the tariffs might create a new roadblock to an already precarious situation with House Democrats, who have specified they want changes to the deal before they approve it.

House Speaker Nancy Pelosi and Democrats were already upset with Trump earlier last Thursday over his administration’s decision to send a draft statement to Congress that paves the way for moving forward on a vote for the USMCA. Democrats largely viewed the move as an effort to increase pressure for them to pass the deal quickly.

Pelosi and top House Democrats met with Ebrard on Tuesday afternoon for a “constructive and candid discussion” about the replacement deal for NAFTA and Trump’s tariffs threat, a spokesperson for Pelosi said.

Mexican officials held meetings across Washington this week with key Trump administration officials, such as acting Homeland Security Secretary Kevin McAleenan, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer.

Marcelo Ebrard

They’ve also turned to Twitter to broadcast how they’re trying to talk Trump down from the tariffs — a move one former Mexican official called “trying to speak in Trump’s language.”

Mexico is prepared with a plan A and plan B, just in case. One is a proposal for how to tackle illegal migration at the border, and the other is a plan that’s expected to include targeted retaliation on American goods.

Mexico has not offered details on either proposal. But it has specified that while it wants to work out a deal with the U.S., it will not sacrifice Mexico’s dignity.

Trump’s sudden move has already helped to unite Mexico’s business leaders and lawmakers in support of Mexican President Andrés Manuel López Obrador.

Top Mexican lawmakers and business leaders are also in Washington this week for meetings with their U.S. counterparts to ensure that the Mexican government’s message is clear: Tariffs are bad for both economies and for the long-standing alliance between the two nations.

“We’re trying to remind Trump and his administration that we’re their ally — not an ‘abuser,’” a Mexican official said, nodding to Trump’s tweet on Sunday that Mexico has been an “abuser” of the United States, “taking but never giving.”

Mitch McConnell: ‘Not much’ GOP support for Trump’s Mexico tariffs

The Canadians prepared long ago for life with Trump, shuffling their cabinet to deal with the new president in 2017. They even staffed a rapid-response unit within the office of Prime Minister Justin Trudeau that operates like a campaign war room, dedicated to crises caused by the U.S. president.

The challenges with Trump have forced Mexico and Canada to lean on each other regularly, strategizing around how to handle a U.S. leader well accustomed to attacking long-time allies.

In public, Canadian officials insist the latest standoff is a bilateral issue between the U.S. and Mexico. Canadian Minister of Foreign Affairs Chrysia Freeland reiterated Monday the Canadian view that it doesn’t affect USMCA implementation.

But they’re still talking quietly behind the scenes. Freeland and Mexican Economy Secretary Graciela Márquez had a Friday evening phone chat to discuss how to navigate the latest crisis out of Washington.

Their informal mutual support network has generally been reliable, despite a few hiccups along the way.

Both countries worked together through the renegotiation of NAFTA over the past two years. Their common front only broke late in the negotiation, leading to one heated argument between Canadian and Mexican officials last year about which country had betrayed the other by cutting side deals with the U.S.

But this year they stood in lockstep over steel tariffs, with a new government leading Mexico.

Mexico could have had a tariff lift sooner, but refused to go along without Canada.

In recent weeks, López Obrador and Canadian Prime Minister Justin Trudeau’s governments worked together with top U.S. lawmakers to get the message out that Trump’s steel and aluminum tariffs needed to be lifted after months of deadlock.

López Obrador had instructed Seade to negotiate with Lighthizer to pull back the tariffs as quickly as possible to clear the path for USMCA passage. The Mexican leader has repeatedly expressed a desire to put the trade pact behind him so he can focus on domestic issues and bring certainty to investors in Mexico.

With that mandate, Seade met with Lighthizer over three weeks for intense discussions to end U.S. tariffs.

That’s when Seade and Lighthizer phoned Freeland to set up individual meetings with her to discuss the potential deal.

“Her conflict was really with the United States. It was a bilateral issue. But, you know, we’re in a deal together,” Seade said when the deal was announced.

Seade and Márquez headed to Canada three days later to present the deal with the United States.

During that trip, the Mexican and Canadian officials then discussed how lifting the tariffs would create momentum for passage of USMCA in their respective legislatures.

Freeland had already been in close contact with Senate Finance Chairman Chuck Grassley (R-Iowa) about the need for the Trump administration to lift the duties to clear a path for ratification in all three countries. She also promised help for Mexico in implementing its landmark labor reform, which U.S. Democrats and their union allies are watching closely.

Freeland met the following day with Lighthizer in Washington and the steel tariffs were quickly lifted on both countries.

That brought two weeks of relative peace in the North American neighborhood.

The mood remained all positive before the head-spinning plot twist with the latest tariffs on Mexico that threatened to blow everything up once again.

Last Thursday, Pence had just left a celebratory feeling in Ottawa when both countries heard about new tariffs. Two Canadian officials said it never came up in Pence’s meeting with Trudeau.

“It surprised everyone,” one senior Canadian official said.

Andrew Restuccia contributed to this report.

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