Canada and Mexico deepen ties amid Trump trade war

Canada and Mexico announced a new strategic partnership aimed at expanding cooperation on trade and security, as both countries contend with rising economic pressure from the United States. The agreement follows a bilateral meeting in Mexico City between Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum, who sought to present a united front on issues that stretch from border security to supply chains amid a broader push by Washington to reshape North American trade.

Carney and Sheinbaum portrayed the talks as a constructive step toward aligning the two countries more closely with Washington’s economic posture while maintaining a distinct, autonomous approach to their own interests. Carney told reporters that the partnership would be built on reciprocity and shared goals, while highlighting how North American cooperation could strengthen the region as a whole.

"We compliment the United States, we make them stronger, and we are all stronger together," Carney said during a joint news conference, underscoring a desire to avoid a rift with Washington even as Ottawa and Mexico City chart their own course." The two leaders exchanged gifts and courtesy remarks, with officials signaling warmth and a readiness to lock in longer-term cooperation that would outlast current political cycles.

The agreement, described by Carney as a vehicle to deepen ties over the coming decades, aims to expand trade, coordinate on border security, and cooperate on combating transnational organized crime. Carney later stressed that the partnership would cover not only traditional trade issues but also security and governance matters that affect cross-border commerce and the everyday lives of citizens on both sides of the border.

Trade between Canada and Mexico was valued at C$56 billion ($40.5 billion) in 2024, a figure that many officials in both capitals said underscored the importance of a stable, predictable bilateral relationship even as Washington presses for changes to regional trade arrangements. The talks touched on issues that have reverberated through North America since the start of the US‑led tariff era, including the impact of American levies on steel, pharmaceuticals, and other goods, and the ways in which those levies complicate cross-border supply chains.

Both countries have been hit by U.S. tariffs in various sectors: Canada faces a 50% tariff on steel, a 25% tariff on certain goods such as automobiles and some other products, and a 35% statutory backdrop that comes with a tax-on-extraction framework for some sectors; Mexico has faced a 25% fentanyl tariff cited by the United States as a tool to curb illicit drug flows, as well as sector-specific levies that have provoked domestic political friction. Washington also signaled a potential 30% tariff on Mexican imports at one point, though that proposed levy was paused for 90 days with the aim of completing a broader trade deal.

The two leaders reaffirmed their support for the U.S.-Mexico-Canada Agreement (USMCA), a renegotiated treaty that remains the cornerstone of tri-national trade since its inception in 1994. Washington has begun soliciting feedback from American businesses on changes they would like to see when the USMCA is reviewed in 2026, signaling that the three countries may face another round of renegotiation considerations in the years ahead. Canada and Mexico have generally supported the agreement as a framework that has helped maintain North American competitiveness, even as Washington’s tariff measures complicate the trade relationship.

Observers say the renewed alignment between Ottawa and Mexico City is designed to project unity without provoking Washington or jeopardizing access to the U.S. market. "It’s a subtle dance," said Sebastián Vallejo Vera, a political scientist at Western University. "Canada and Mexico want to show unity, without appearing to gang up on the U.S. at the negotiating table."

The talks come at a time when both nations are recalibrating their diplomacy in the face of a protectionist U.S. president who has redefined global and North American trade by imposing wide-ranging tariffs on many trading partners. In Canada’s case, the government has faced domestic pressure over tariff relief and a slow return to normal trade volumes, while Mexico has sought to maintain stable exports to the United States amid volatility in broader regional production chains. Carney’s visit marks what officials described as a reset in bilateral relations with a country that has long teased closer ties than those with the United States alone.

Analysts note that Carney, in particular, is seeking to diversify Canada’s economic partnerships as the country navigates a U.S. tariff landscape that has put pressure on Canadian industries, including steel, energy, and automotive sectors. They suggest that closer proximity to Mexico could help Canada hedge against risk in its export-driven economy, while Mexico could gain a more predictable partner in the north as it navigates its own trade interests and security concerns amid evolving U.S. policies. Still, the timing remains sensitive: any movement away from a U.S.-centric stance risks political backlash at home if Americans believe Canada and Mexico are offering concessions in exchange for relief, a dynamic observers say both sides are trying to avoid.

For Sheinbaum, the meeting was also framed as a reaffirmation of Mexico’s standing as a sovereign actor capable of shaping its own economic destiny while maintaining a cooperative stance toward the United States. Observers point out that Sheinbaum has largely pursued a calm, non-confrontational approach toward Washington to preserve Mexico’s manufacturing base and its role as a major link in the continental supply chain.

Beyond trade, border security and the fight against cross-border crime were recurring themes. Officials said the countries would coordinate more closely on law enforcement, customs procedures, and information sharing to improve the flow of legitimate trade while curbing illicit activity. The partners also signaled a shared interest in reducing regional vulnerabilities to shocks in global markets by strengthening supply chains and diversifying trade routes.

The renewed emphasis on cooperation comes as both nations confront broader questions about their role in a rapidly shifting global economy. The 30-year horizon that Carney invoked signals a long-term view of trilateral dynamics in North America, even as U.S. policymakers recalibrate their approach to trade and security with Canada and Mexico in the context of a broader reevaluation of globalization.

Will Grant, Central America and Cuba correspondent, and others contributed reporting to this story.