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Canada shares U.S. concerns about Mexican trade with China
TORONTO | Canada’s point person for U.S-Canada relations said Tuesday she shares U.S. concerns about Mexico serving as a back door for China to import cheaper goods into the North American market as a review of the trade pact known as the U.S.-Mexico-Canada Agreement looms.
Deputy Prime Minister Chrystia Freeland said members of the outgoing administration of U.S. President Joe Biden and supporters and advisers of President-elect Donald Trump have expressed “very grave” concerns to her about the issue and Canada shares them.
“We are perfectly aligned with the United States and that means we are not a back door to unfair Chinese traded goods,” Freeland said during a press conference. “The same cannot be said about Mexico.”
Canada announced this year it is launching a 100% tariff on imports of Chinese-made electric vehicles, matching U.S. tariffs imposed over what the countries say are China’s subsidies that give its industry an unfair advantage. Canada has also imposed a 25% tariff on Chinese steel and aluminum. Mexico does not have similar tariffs.
“We believe that China’s intentional overcapacity is unfair and a threat to key Canadian industrial sectors. It is a threat to Canadian jobs and that’s why we’ve imposed 100% tariffs on Chinese EVs, 25% tariffs on Chinese steel and aluminum,” Freeland said.
Mexico’s foreign affairs ministry didn’t immediately respond to a message seeking comment.
Canadian Prime Minister Justin Trudeau called Trump after his election win and the two discussed the trade deal Trump reached during his first term with Canada and Mexico, the USMCA, which replaced the North American Free Trade Agreement, or NAFTA.
Ottawa will soon have to focus on a scheduled review of the agreement in 2026.
Doug Ford, the premier of Canada’s most populous province of Ontario, suggested this month that Canada should forge ahead on a bilateral trade deal with the U.S. if Mexico doesn’t clamp down on Chinese auto imports entering North America.
During the recent U.S. election campaign, Trump proposed tariffs of 10% to 20% on foreign goods — and in some speeches has mentioned even higher percentages.
Freeland chairs a special cabinet committee on U.S-Canada relations that is designed to address concerns about another Trump presidency. She spoke to reporters Tuesday after a committee meeting.
During Trump’s first term, his move to renegotiate NAFTA and reports that he was considering a 25% tariff on the auto sector were considered an existential threat in Canada at the time.
Canada is one of the most trade-dependent countries in the world, and 75% of Canada’s exports, which include automobiles, go to the U.S.
Freeland said this is a “serious time for our country” and called on Canadian leaders in business and government to rally together.
Congressional panel urges toughing the U.S.-China trade relationship
WASHNGTON | A congressional panel has recommended that the U.S. toughen its trade relationship with Beijing, pushing to roll back a nearly 25-year-old decision that helped bring about China’s rapid economic growth but that many in Washington now see as hurting U.S. interests.
In its annual report to Congress released Tuesday, the U.S.-China Economic and Security Review Commission called for the first time for ending permanent normal trade relations with Beijing. It echoes moves by prominent Republican lawmakers — including Sen. Marco Rubio, President-elect Donald Trump’s pick for secretary of state — as the trade war with China is expected to intensify under the incoming administration.
The change would mean the U.S. reintroducing annual reviews of China’s trade practices and gaining more leverage to address “unfair trade behaviors,” the commission said in the report.
“This move would signal a shift toward a more assertive trade policy aimed at protecting U.S. industries and workers from economic coercion,” the report said.
It is among nine pages of recommendations put forward by the commission, created in 2000 to monitor the national security implications of the new trade relationship between Washington and Beijing.
The congressional decision in the last year of the Clinton administration facilitated China’s entry into the World Trade Organization in 2001, with the hope that integration into the U.S.-led global economy and economic prosperity could lead to political liberalization in China.
That has not happened, and the trade relationship took a turn in 2018, when Trump launched a trade war with China to tackle trade imbalances.
This year, on the campaign trail, Trump vowed to levy 60% tariffs on Chinese products to further narrow the trade deficit, a threat that experts say could set back China’s economy and drive up consumer costs in the United States. The trade imbalance stood at $279 billion for 2023, down from $418 billion in 2018.
In September, a group of Republican senators, including Rubio, introduced a bill to end permanent normal trade relations with China. The designation significantly lowers trade barriers.
“Giving Communist China the same trade benefits that we give to our greatest allies was one of the most catastrophic decisions that our country has ever made,” Rubio said when introducing the bill.
Trump picked Rubio — known for his ideological opposition to communism and his hard-line stance on China — to lead the State Department. The choice needs to be confirmed by the Senate.
“Our country’s trade deficit with China more than quadrupled, and we exported millions of American jobs. Ending normal trade relations with China is a no-brainer,” Rubio said.
Last week, Rep. John Moolenaar, a Michigan Republican who leads the House’s Select Committee on the Chinese Communist Party, introduced a corresponding bill.
Jersey Mike’s acquired by private equity firm Blackstone
NEW YORK | Jersey Mike’s, the quickly expanding sandwich chain, is being acquired by asset management giant Blackstone.
In the transaction announced Tuesday, private equity funds managed by Blackstone will be used to acquire majority ownership of Jersey Mike’s. The deal is “intended to help enable Jersey Mike’s to accelerate its expansion across and beyond the U.S. market,” the companies said, as well as aid ongoing technological investments.
Blackstone and Jersey Mike’s did not immediately disclose financial terms in their Tuesday announcement. But a source familiar with the matter confirmed to The Associated Press that the transaction would value Jersey Mike’s at around $8 billion, a figure previously reported by The Wall Street Journal.
The acquisition of the private company is expected to close in early 2025, subject to regulatory approvals and other closing conditions. Under terms of the agreement, Jersey Mike’s founder and CEO Peter Cancro will continue to lead the business and maintains a “significant equity stake” in the chain, the companies said.
“We believe we are still in the early innings of Jersey Mike’s growth story and that Blackstone is the right partner to help us reach even greater heights,” Cancro said in a prepared statement — adding that Blackstone “has helped drive the success of some of the most iconic franchise businesses globally.”
Jersey Mike’s roots date back to 1956, with a Point Pleasant, New Jersey storefront location that was originally called Mike’s Subs. In 1975, Cancro, then a 17-year-old high school senior who had worked there since he was 14, bought the operation with the help of his football coach.
The chain has expanded rapidly over the last decade, more than tripling its locations from 857 stores in 2014, to more than 2,800 this year, according to Technomic, a restaurant consulting company.
Jersey Mike’s posted sales of $3.3 billion in 2023, up 25% from the prior year, according to Technomic. It’s the 30th largest chain in the U.S. based on annual sales.
Its aggressive growth has helped Jersey Mike’s take market share from rivals like Subway, which has been struggling with a glut of aging stores. Last year, Subway was acquired by Roark Capital, a private equity firm with expertise in restaurant management. Roark also owns Inspire Brands, which houses two other Jersey Mike’s rivals: Jimmy John’s and Arby’s.
Tuesday’s agreement with Jersey Mike’s follows a series of similar investments from Blackstone. Just earlier this year, the private equity firm acquired Tropical Smoothie Cafe in a deal that it said would also aid the chain’s expansion.
—From AP reports
