On Thursday, Canadian Prime Minister Mark Carney is set to travel to Mexico in a strategic move aimed at diversifying trade relationships as both nations brace for an upcoming review of the United States-Mexico-Canada Agreement (USMCA). This trade pact is slated for review in 2026, making it essential for both Canada and Mexico, where over 75% of Canada’s exports and more than 80% of Mexico’s exports are directed to the United States.
Canadian Senator Peter Boehm highlighted that during this visit, Carney and Mexican President Claudia Sheinbaum are expected to discuss their respective perspectives and experiences dealing with the U.S. administration under President Donald Trump. In Boehm’s view, the discussions will revolve around the sentiments expressed by premiers from various Canadian provinces who last year suggested excluding Mexico from any new trade deals with the U.S. Such comments were perceived as disrespectful by Mexico, prompting a need for dialogue to alleviate tensions.
Carney aims to strengthen bilateral relations with Mexico during his two-day visit, especially after the discontent expressed by provincial leaders regarding perceived comparisons made by Trump between Canada and Mexico concerning issues such as fentanyl smuggling. Ontario Premier Doug Ford criticized Trump’s remarks as “the most insulting thing” he has ever heard from a close ally.
Boehm, who represented Canada when Sheinbaum was inaugurated last year, noted a recent improvement in diplomatic relations, underscoring Mexico’s appreciation for Carney inviting Sheinbaum to the G7 summit in Alberta in June. The Canadian government has shown consistent engagement with Mexico, including the dispatch of Carney’s foreign and finance ministers for discussions with Sheinbaum in August.
Historically, trade between Canada and Mexico has been significant. Boehm pointed out that Canadian trade with Mexico surpasses the total trade Canada conducts with the entire European Union, including the U.K. Mexico holds the position of Canada’s third-largest trading partner, following the U.S. and China, and was Canada’s fifth-largest trading partner in 2024.
Despite the importance of the U.S. market to both nations, the preservation of the USMCA remains critical. The agreement offers a key exemption that protects a vast majority of goods from extensive tariffs, though sector-specific tariffs imposed by Trump, particularly the 50% tariffs on steel and aluminum, pose ongoing challenges for Canadian and Mexican industries.
According to Nelson Wiseman, a professor emeritus at the University of Toronto, the looming presence of Trump adds a layer of urgency to Carney’s visit. He explained that while both leaders express interest in boosting trade between Canada and Mexico, their immediate priority is to devise strategies on how to effectively manage their negotiations with the Trump administration regarding the USMCA. Carney and Sheinbaum recognize that collaborating on these fronts may yield better results than pursuing separate agreements.
In her remarks, Sheinbaum emphasized that discussions have focused on enhancing trade between the two countries, reiterating the mutual desire to maintain the USMCA. She noted that working groups related to the treaty's review are already being established, aimed at preparing for the formal review process set to commence in early 2026. Furthermore, Mexico is keen to attract more Canadian investment while insisting that mining companies adhere to Mexican laws and environmental regulations, which have not always been followed.
With Canadian companies being the largest foreign investors in Mexico’s mining sector, responsible for nearly 70% of foreign investment in this area, the stakes in this bilateral relationship are significant. Carney will meet Sheinbaum for a one-on-one discussion on Thursday, followed by a working lunch that will include their cabinet ministers and secretaries. The visit will conclude with Carney attending events at the Canadian embassy on Friday.
