The Daily Signal - Victor Davis Hanson: Canada and Mexico Want U.S. Billions—But Also a Fight 

Episode Date: June 30, 2025

With the U.S.' northern neighbor at bay, for now, Americans should turn their attention to the south, where Mexican President Claudia Sheinbaum continues to criticize proposed remittance taxes while defending illegal immigration and even weighing in on U.S. civil unrest. Why the hostility?   On today’s episode of “Victor Davis Hanson: In His Own Words,” Hanson asks the question: Why are our supposed “partners” adding fuel to the fire in a time of instability?   “  This is the killer. They're going to enforce the law all the way back to 2022. … There's $9 trillion of market capitalization in Silicon Valley. But the idea that they're going to be gouged for $2 or $3 billion right in the middle of these heated discussions.   “ They are playing with fire. I have a solution. Maybe we could take Mexico and put it next to Canada and let them fight it out with each other. And keep us out of it.” (0:00) North American Trade Relations (0:27) Trade Disputes with Mexico (2:05) Canada's Digital Services Tax (3:54) Mexico's Trade Surplus and Remittances (5:25) Contentious Issues and Proposed Solutions 👉 This episode is sponsored by the Pepperdine School of Public Policy. Learn more: https://go.pepperdine.edu/dailysignal 👉Don’t miss out on Victor’s latest videos by subscribing to The Daily Signal today. You’ll be notified every time a new piece of content drops: https://youtube.com/dailysignal?sub_confirmation=1    👉If you can’t get enough of Victor Davis Hanson from The Daily Signal, subscribe to his official YouTube channel: https://youtube.com/victordavishanson7273    👉He’s also the host of “The Victor Davis Hanson Show,” available wherever you prefer to watch or listen. Links to the show and exclusive content are available on his website: https://victorhanson.com  Learn more about your ad choices. Visit megaphone.fm/adchoices

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We'd love to talk. Business. I'd like to talk about our two North American partners, Canada and Mexico. We've been in disagreements on trade and other issues about the border with both of them recently. You know, there's about $1.5 trillion of total trade between Mexico, the United States, and Canada. Mexico runs about three times a surplus that Canada does with us. About $171 billion per year. They get $63 billion in remittances.

Why would Ms. Scheinbaum start saying to us that taxing two or three percent that's unacceptable to Mexico? Or why would she weigh in on the L.A. riots and say that she's going to protect Mexican nationals. If you're going to protect Mexican nationals, the best thing you could do is say, come home. We want you. Hello, this is Victor Davis-Hanson for the Daily Signal. I'd like to talk about our two North American partners, Canada and Mexico. We've been in disagreements on trade and other issues about the border with both of them recently. But here's what's happened. Given all this contention, you would think that Ms. Shinebaum and Mr. Carney and Canada would want to cool passion.

But that's not what happened. Recently, Canada decided that they were going to enforce the digital services tax. That was something that was passed but not enforced yet. And what it was is a 3% tax. on our tech companies, Amazon, Apple, Meta, Google, by anybody in Canada who uses their service. You buy something online, you buy an ad, you pay a fee to any of these, and you're Canadian, then you're going to pay 3%. They're going to have to have a 3% tax for the use of Canadian consumers.

And they don't even have to be in Canada. that they can be in the United States. So they're going to charge them 3%. And this is the killer. They're going to enforce the law all the way back to 2022. So all of a sudden, next month, our tech companies, not that I worry about their financial situation, there's $9 trillion of market capitalization in Silicon Valley,

but the idea that they're going to be gouged for two or three billion dollars, right, in the middle of these heated discussions. And what are those heated discussions? Canada has $63 billion in trade surpluses with us. That's one backdrop. They have an unenforce border. As we close the southern border, some of the influxes of drugs and illegal aliens started to come northward. And, of course, they pay 1.37 in NATO contributions.

So given that all those are contentious issues, why would the Canadians now create a new tax? I know they passed it a while back. But why would they start enforcing it right now and try to rub our noses? It makes no sense. The same thing is true of Mexico. You know, there's about $1.5 trillion of total trade between Mexico, the United States, and Canada. And if you look at it, most of that growth and wealth is in the United States. Mexico runs about three times a surplus that Canada does with us.

about $171 billion per year. They have about $20 billion going to their cartels that diffuses through the economy, and they get $63 billion in remittances on top of the 171 billion in trade surpluses. And this is in addition to about $60 to $70 billion going into Central America, some of which comes through Mexico as these people either go into the United States or go back to Central America. So they do profit from that as well. So what am I getting? Why would Ms. Scheinbaum start saying to us that taxing 2 or 3 percent, that's what the Senate version is, maybe 4 or 5 in the House, that's unacceptable to Mexico?

Or why would she weigh in on the L.A. riots and say that she's going to protect Mexican nationals. If you're going to protect Mexican nationals, the best thing you could do is say, come home, we want you. Our fertility rates going down. You have no business in the United States. That's a foreign country because you entered illegally and you're residing illegally. So, bottom line, why is Mr. Carney trying to rub salt in these very painful wounds that we've been going through the last few months by initiating a retroactive, kind of a bill of a tanger tax? And if that goes through, believe me, the Europeans will follow suit. And why is Ms. Scheinbaum weighing in on the big, beautiful bill and telling us not to tax remittances,

which is one reason why she's opened her Guatemalan border and welcomed people in here and Mexican citizens in here to get that $63 billion? And why would she weigh in in this very contentious period in Los Angeles disruptive? We have the Olympics coming. We have Mexican nationals spitting, burning. on the American flag, waving the maximum, don't weigh in. What would be the solution? We don't have a solution, but they are playing with fire. I have a solution. Maybe we could take Mexico and put it next to Canada and let them fight it out with each other and keep us out of it. Thank you very much. This is Victor Davis-Hansson

for the Daily Signal. Thank you for tuning in to the Daily Signal. Please like, share, and subscribe to be notified for more content like this. You can also check out my own website at victorhansen.com and subscribe for exclusive features in addition.