Mexico and Canada deepen ties ahead of USMCA trade talks with Trump

Neither partner is going anywhere. Mexico and Canada are committed to renewing and improving the USMCA free trade agreement with the United States in 2026, according to Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney, following their meeting this Thursday at the National Palace in Mexico City.

Both Sheinbaum and Carney acknowledged that the global shift toward protectionism heralds a complex negotiation, but that the North American region remains highly competitive in the global scene. “The USMCA will prevail,” the Mexican president stated.

With the treaty renegotiation on the horizon and Trump in the Oval Office, the question of whether Mexico and Canada will build an alliance to take advantage of the talks with the United States has been cleared up. “Obviously, we’re going to cooperate directly. The USMCA is the strength of the three countries as a whole, and it contributes to North America’s competitiveness. There are opportunities for improvement,” Carney said, in response to the persistent question of whether the two partners will ultimately work on a strategy to negotiate with Washington. “It’s competitive for all three countries. The best way to compete with other regions of the world is to remain in the USMCA,” Sheinbaum added.

On Wednesday, the three USMCA partners launched formal consultations on the treaty in their respective countries. Following these consultations, the interests of each member and the sectors in which they will negotiate jointly or bilaterally will be revealed. But there is a risk that the agreement will not come to fruition as long as Trump’s threats continue. The harmony that Sheinbaum and Carney showed this Thursday in Mexico paints an encouraging picture for the start of negotiations, but puts the United States on alert.

Mexico and Canada have anchored a significant portion of their economic development over the past 30 years to the USMCA, an agreement that provides for trade in goods between the three partners worth $1.6 trillion annually. Despite the strength of the United States, Mexico and Canada have quietly strengthened their relationship: bilateral trade and investment between the two countries totaled $56 billion in 2024. Mexico is Canada’s third-largest trading partner, and the economic relationship has been reflected primarily in the automotive industry, mining, and energy infrastructure.

The rapprochement between Mexico City and Ottawa has also been formalized with a series of agreements on trade, investment, and security that Sheinbaum and Carney sealed during this visit. They call it the Mexico-Canada Action Plan 2025-2028, and it can be summarized as investments in ports, railways, the aerospace sector, and energy.

Following Trump’s protectionist shift, both countries have designed plans to boost their economies through domestic consumption. The Republican president imposed 35% tariffs on Canadian goods outside the USMCA, while Mexican goods face a 25% tax. This year, Sheinbaum promoted Plan Mexico, which seeks to attract investment to boost domestic production. Carney, for his part, launched Canada Strong earlier this month, a campaign that seeks to strengthen consumption of local products and build domestic supply chains.

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