MEXICO CITY — President-elect Trump’s pledge to impose tariffs on Mexico and Canada threatens to upend decades of North American integration, a bumpy process that’s recast the two U.S. neighbors as providers of raw and finished goods for the world’s biggest economy.

In some ways, Canada and Mexico have traded places over the past three decades.

Before the North American Free Trade Agreement (NAFTA), Mexico was a mid-tier petrostate without a competitive industrial base. Now, its economy is dependent mostly on manufacturing, tourism, agricultural exports and cash sent home by Mexicans abroad.

Meanwhile, Canada went from a small but advanced manufacturing economy to an oil and gas giant, funneling massive amounts of hydrocarbons to the United States.

Those transformations have both taken place to fit neatly into the U.S. economy’s larger needs.

But that three-way integration is facing headwinds, not least from Trump, who on Monday threatened United States-Mexico-Canada Agreement (USMCA) partners with 25 percent across-the-board tariffs on day one of his presidency in retaliation for their roles in migration and the illicit fentanyl trade.

“Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!” Trump posted on Truth Social.

At risk, beyond the harmony of North American diplomatic relations, are the fundamentals of the continent’s manufacturing base.

“The value chains — the value chains have been designed around the context of integration,” said Ildefonso Guajardo, Mexico’s former secretary of Economy and lead negotiator on the USMCA

Value chains or supply chains — producing and assembling parts throughout the continent before putting them into a final product — have become a key competitive advantage for North American industry writ large, and the raison d’être for a broad segment of Mexican industry.

Those chains only exist in Mexico thanks to massive infrastructure investments, ranging from road and rail connections to gas pipelines to industrial parks that can cover nearly 10,000 acres.

And the value chains extend beyond automotive or TV manufacturers. For example, the gas pipelines in Mexico are pumping U.S. natural gas.

Overall U.S. exports of the hydrocarbon, including........

© The Hill