Canada is working to redefine their relationships with Mexico while Donald Trump threatens their US -punitive neighbors before the planned free trade pact in North America.
Prime Minister Mark Carnery sent his main diplomat and finance chief to the Mexican capital this week, where they met with President Claudia Sheinbaum and her advisors, as well as corporate executives.
The initiative represents an attempt to overcome the differences that emerged in the last months of the previous Canadian administration, when provincial leaders considered leaving Mexico aside in commercial negotiations with the US – and Carry’s predecessor did not rule out this possibility.
Free tool
XP Simulator
Learn in 1 minute how much your money can yield
Trump raised last week to 35% rates on Canadian products that do not comply with the continental free trade agreement, in part because Canada retaliated their tariffs. Mexico, who did not respond with retaliation, received a postponement of 90 days while negotiations with the US continues.
“This is a moment of total mobilization to rekindle the bilateral relationship,” Canada Foreign Minister Anita Anand said in a telephone interview by ending her two -day visit to Mexico City.
In addition to a one-hour conversation with Sheinbaum, Anand and Finance Minister François-Philippe Champagne, they also met with the economy’s tsar and Mexico’s head of energy. On the business side, the conversations included representatives of the Canadian Pacific Kansas City Ltd., TC Energy Corp. and the Giant of Pensions Caisse de Dépôt et Placement du Québec.
Continues after advertising
During the meetings, both sides explored how Canadian companies and investors can help build infrastructure in Mexico that facilitates bilateral trade, including ports and railways, according to a person with direct knowledge of negotiations. Strengthening energy security, including conventional and renewable energy, was also discussed.
Read more:
“This visit is part of Canada’s diversification strategy to enjoy the connection with Mexico,” said, a researcher at the Center for Strategic and International Studies in Washington, which focuses on US commerce. But, he added, it is also “damage control.”
Continues after advertising
Last year, before Trump’s return to the White House for his second term, Ontario’s Premier, Doug Ford, and Alberta leader Danielle Smith, publicly accused Mexico of not doing enough to contain China’s trade threats and said Canada was better dealing with the US alone. The then Prime Minister Justin Trudeau echoed these concerns, which Mexico saw as a betrayal.
This episode made “more difficult for both countries to coordinate” a response to Trump, Marroquin said. This is also why Mexico now adopts a “silent diplomacy strategy”, while Canada focuses on “more in retaliation and market diversification”.
Trudeau, deeply unpopular after almost a decade in office, announced his departure earlier this year. Carney won the internal dispute to succeed him and called an early election in April, taking advantage of a wave of anti-Trump feeling to overcome a major disadvantage in the polls and ensure a fourth consecutive liberal mandate.
Continues after advertising
Since taking over as Prime Minister, Carney has begun to notice ties with India and China after bitter diplomatic disputes. In June, sheinbaum invited to the summit of the seven group that hosted Kananaskis, Alberta. The Mexican leader participated with the main intention to meet Trump, but the US President came out before his arrival due to the Israel-Sand conflict.
The next step to recalibrate the relationship between the two smaller partners of the US commercial agreement will be a Carry visit to Mexico. Although not yet scheduled, Anand and Champagne have prepared the ground during their trip. “Considering that Mexico is Canada’s third largest commercial partner, this is an extremely important relationship,” said Anand.
Carry’s visit would be the first for a bilateral meeting-without the presence of the US President-since Trudeau met with former President Enrique Peña Nieto in 2017. The Canadian leader returned to Mexico in 2023 for the “Three Friends” summit with Joe Biden and Andrés Manuel López Obrador.
Continues after advertising
After Anand and Champagne conversations in Mexico, Canadian Energy Minister Tim Hodgson said on Thursday that he met virtually with his counterpart Luz Elena González to discuss how the two countries can deepen collaboration. “There is a real impetus in the Canada-Myxical relationship,” he said in a post on X.
“The Carnery government has wisely decided to intensify efforts to collaborate with Mexico,” said Laura MacDonald, a political scientist at Carleton University in Ottawa. She added that perhaps it is not so much a difference between the Trudeau and Carry governments, but a “recognition of what happened in the intermediate period.”
Sheinbaum has been praised for his strategy in negotiations with Trump, who said respecting her. This allowed the Mexican president, if he did not avoid tariffs, at least put his country in a privileged position compared to other nations. Mexico Minister of Economics, Marcelo Ebrard, said Anand and Champagne wanted to know more about their experience during the visit.
Continues after advertising
Although the United States-Manada agreement protects most exports to the US, both countries face steel, aluminum and automobile rates. While the two US neighbors share common interests in the USMCA review scheduled for next year and should work together, they should not make it a large fuss, according to Carlo Dade, international director of the University of Calgary School of Public Policy.
“The first rule about the fight club is not to talk about the fight club,” said Dade. “The last thing we want is that they think they are being attacked together.”
Goldy Hyder, head of Canada Business Council, has advocated the expansion of trade with Mexico and met Sheinbaum on the sidelines of the G-7. He praised the Carnery government for trying to rekindle the relationship.
Mexico represents the “easiest available fruit” to increase Canada exports. “Você nem precisa enviar as coisas por navio”, disse ele. “This is an opportunity where we can diversify right here on our continent before thinking about Europe, Asia or anywhere else.”
For Marroquin, the CSIS researcher, the warming of ties represents an opportunity to rebalance the US -focused continental commercial partnership. “What was missing was political will,” he said. “This is something we lost after the premier Ford and Premier Smith comments.”
© 2025 Bloomberg L.P.
