HONG KONG — After more than a year of fitful negotiations, President Trump and the leaders of Canada and Mexico this week marked a new free trade agreement meant to pull together the three economies.
And, from Washington’s view, it has also meant push away a fourth: China
One of the most significant elements of the new United States-Mexico-Canada Agreement, analysts say, may be two lines tucked near the end of the accord. Nicknamed the “Trump veto” by some Canadian politicians, Clause 32 Section 10 allows signatories to pull out of the USMCA if one country pursues a separate free trade agreement with a “nonmarket country” — a thinly veiled warning, in other words, against any side deals with China.
The fine print in the North American pact offers the latest sign of how the deepening rivalry between the two largest economies is spilling over and threatening to polarize the world.
On Sunday, a senior Trump administration official said the new deal, which effectively replaces the North American Free Trade Agreement, would allow the White House to focus its attention on China. The deal would be a “playbook” for future trade deals, the official said, suggesting that Washington could pressure other allies to loosen their trade ties with Beijing.
Jorge Guajardo, a former Mexican ambassador to Beijing, said the message carried in the USMCA veto clause was stark. “It sent a very strong signal to the rest of the world that you’re either with us versus China, or you’re against us,” Guajardo said. “Beijing should be very concerned.”
China’s Foreign Ministry has not commented on the USMCA — the country is celebrating a week-long national holiday — but the moves will probably reinforce a deepening sense in China that the United States and its allies are orchestrating a concerted effort to thwart China’s rise not just in trade but in diplomacy, technology and military affairs.
“For Beijing, this is all just one more piece of Trump’s anti-China strategy,” said Alan Chong, a professor of international relations at the S. Rajaratnam School of International Studies in Singapore.
Matthew Pottinger, the U.S. official spearheading China policy on the National Security Council, told an audience at the Chinese Embassy last week that the United States and China were undeniably engaged in competition.
In a major propaganda push last week, Chinese President Xi Jinping called on his country to be unified and prepared to grow its own food and develop its own technologies in the face of growing isolation.
“Unilateralism and trade protectionism are rising, forcing us to adopt a self-reliant approach. This is not a bad thing,” Xi was quoted as saying in the People’s Daily, the ruling Communist Party’s official newspaper.
State media carried extensive reports and photos of Xi surveying expansive fields of wheat and early Communist-era heavy machinery factories — scenes purposely redolent of the People’s Republic’s fledgling years, when it overcame diplomatic isolation and economic setbacks.
In Canada, the “Trump veto” clause has been a source of controversy, with opposition politicians questioning whether Prime Minister Justin Trudeau weakened Canada’s independence by agreeing to a clause that would limit its negotiating options with a major trading partner like China.
Trudeau rejected the suggestion Monday, telling reporters that Canada would “continue to engage in increasing our trade footprint all over the world.”
Lawrence L. Herman, a Toronto trade lawyer who has represented the Canadian government, said the USMCA clause was extremely unusual. But he said it was more of an American political statement aimed at China than a real effort to undermine Canada’s sovereignty.
“I’ve never seen a provision like it,” Herman said. “But the angst over it is unwarranted. It’s largely political, a reflection of the fact that the large battle the U.S. is engaged in is with China.”
The meat of the accord centered on changes that would benefit a handful of major U.S. industries — oil companies, dairy farmers and pharmaceutical companies — possibly at the expense of consumers.
China has complained bitterly about the United States “holding a knife to our neck” to force trade concessions while negotiations have all but broken down, with no more talks planned in the foreseeable future. A Chinese delegation was expected in Washington last week, but the visit was canceled after Trump announced tariffs on $200 billion worth of Chinese goods, infuriating Chinese leaders. Beijing responded by announcing tariffs of 5 percent to 10 percent on an additional $60 billion worth of U.S. imports.
Efforts by Chinese delegations to meet with American officials in formal and informal settings have been rebuffed in recent months, people familiar with the matter say, with a top Chinese trade negotiator, Wang Shouwen, only getting an audience with mid-level Department of Agriculture officials last month.
Guajardo, the former Mexican ambassador, said there is a growing recognition in Beijing — and Washington — that the Trump administration has engaged in trade disputes with many countries but that there’s been a far more profound struggle with China.
“Trump was first fighting the whole world, but then we saw a new NAFTA, a new deal with Korea. Even Europe is crawling its way out of the doghouse. And yet China can’t seem to negotiate its way out,” he said.
The United States and China, Guajardo added, “are locked in an entirely different conflict, something that won’t be short term.”