The Real Risk of a Trade War With Canada
In late October 2025, Honda shut a Mexican plant and halved Canadian Civic production due to a parts shortage caused by China's ban on Nexperia semiconductor exports, a retaliation against U.S. and Dutch actions. The episode revealed the deep integration of North American supply chains and their exposure to Chinese coercion, yet the three governments are focused on internal disputes. The USMCA renegotiation should prioritize countering China's growing monopoly power rather than internal trade terms.
Why it matters: This highlights the theme of supply-chain resilience, showing how Chinese export controls can disrupt integrated North American production and necessitate coordinated policy responses.