Canada’s Carney heads to Mexico to discuss trade before US trade deal review

Canada’s Prime Minister Mark Carney travels to Mexico on Thursday to discuss trade ahead of the 2026 review of the United States–Mexico–Canada Agreement (USMCA), as the two North American neighbors seek to diversify their trade relationships beyond the United States. Data on trade flows highlight the U.S. centrality of the region: more than 75% of Canada’s exports and more than 80% of Mexico’s go to the United States, underscoring why both governments are eager to broaden ties within the pact’s framework.

During the two‑day visit, Carney will have a one‑on‑one meeting with Mexican President Claudia Sheinbaum, followed by a working lunch with their cabinet ministers. The leaders plan to discuss how to strengthen trade within the USMCA and to begin laying the groundwork for the pact’s formal 2026 review. Mexican officials say they intend to preserve the agreement and that working groups related to the review are being formed to align modernization efforts with national interests.

Canada and Mexico have been pushing to expand bilateral commerce within the USMCA while remaining tethered to the United States market. Mexico is Canada’s third-largest trading partner, behind the United States and China, and Canada was Mexico’s fifth-largest trading partner in 2024, underscoring the mutual importance of the relationship even as the U.S. remains the dominant trading partner for both countries.

Trade policy remains a key backdrop to the visit. While the USMCA provides a broad structure for cross-border commerce, U.S. policy moves, including Section 232 tariffs on steel and aluminum, continue to shape industry planning. A 50% tariff on steel and aluminum imports is cited as an ongoing constraint in certain sectors, prompting Canada and Mexico to coordinate closely on responses should U.S. policy shift during the review period.

Sen. Peter Boehm, a Canadian representative, said the trip underscores a changing dynamic in which both countries face a common external challenge from Washington. He argued that facing Trump-era tariffs and policy scrutiny together may be more effective than pursuing separate deals, while stressing that both sides want to expand bilateral commerce within the existing framework.

Mexico is pressing for more Canadian investment, including in sectors such as mining, where Canadian companies are the largest foreign investors in Mexico’s mining sector, accounting for about 70% of foreign investment. Sheinbaum said Canadian activity must comply with Mexican environmental regulations, signaling that governance and sustainability will be part of the ongoing discussions.

Carney is slated to conclude the visit with a Friday stop at the Canadian embassy, where officials will coordinate further engagement ahead of the USMCA review process that begins in earnest in early 2026. The trip reflects an ongoing effort to diversify trade, strengthen regional ties, and prepare for a renegotiation environment in which Canada and Mexico seek greater balance with the United States.