Canada and Mexico vow closer economic ties amid Trump trade shake up

Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum pledged Thursday to strengthen trade relations in the face of US tariff threats.

The pledge came during Carney’s first visit to Mexico as Canada’s leader and at a moment of economic tension for the three nations, set to host the FIFA 2026 World Cup next summer.

Earlier on Thursday, the two leaders walked hand in hand into Mexico City's presidential palace and exchanged gifts.

“North America is the economic envy of the world and is the most competitive economic region of the world, and part of the reason for that is the cooperation between Canada and Mexico,” Carney said in a press conference following the meeting.

“We complement the United States. We make them stronger. We are all stronger together.”

Seeking improved relations at a time of uncertainty

Key to Carney and Sheinbaum’s meeting was the United States-Mexico-Canada trade pact, or USMCA, which is up for review in 2026.

Decades of free trade among the three nations have inextricably intertwined their economies: More than 75% of Canada’s exports and more than 80% of Mexico’s go to the US.

However, US President Donald Trump’s ongoing and constantly evolving trade threats have put the countries’ political and business leaders on edge, prompting them to look for more stable trade alternatives.

“Trump looms over this visit. Mexico and Canada now share a common threat from the US,” said Nelson Wiseman, professor emeritus at the University of Toronto.

On Thursday, Carney said he expects “much greater amounts of trade, much greater amounts of investment” between Mexico and Canada.

Sheinbaum, Mexico's first female president, said the two countries had agreed to a plan that would “bring a new era of further strengthening economic ties” between the two nations.

Sheinbaum has said they want to increase bilateral trade in different sectors through the free-trade agreement and do so through maritime routes, which would avoid those goods having to pass through the United States.

A one-time, not-so-not-so-easy relationship

Canada and Mexico have had a not-so-easy relationship. Last year, some of Canada’s provincial premiers talked about cutting Mexico out of any new free trade deal with the US.

According to Ontario Premier Doug Ford, Trump's comparison of Canada to Mexico was “the most insulting thing I’ve ever heard from our friends and closest allies, the United States of America.”

And Canadian Sen. Peter Boehm, who represented the Canadian government when Sheinbaum was sworn in as Mexico’s president last year, said the comments by the premiers, which he deemed out of their lane, upset the Mexicans.

“The Mexicans are particularly sensitive on these matters, and there was concern about that, no doubt,” Boehm, who has been pushing closer relations between the two governments, said.

Relations recently improved, according to Boehm, who noted Mexico appreciated Carney's invitation of Sheinbaum to the G7 summit in Alberta in June.

Mexico is Canada’s third-largest trading partner after the US and China, and Canada was Mexico’s fifth-largest trading partner last year.