Canada and Mexico Team Up as Trump’s Tariffs Bite

Canada and Mexico have agreed to strengthen co-operation on trade and security as they continue to feel the heat from Washington’s protectionist stance. 

Prime Minister Mark Carney’s first official visit to Mexico City signaled a reset in relations with President Claudia Sheinbaum, with both leaders stressing that North America is stronger when its economies work together.

Tariffs imposed by the US continue to strain both countries. Canada faces steel and aluminium duties of up to 50%, along with 25% on vehicles and 10% on oil and gas. While Carney noted the effective average tariff rate is about 5.6% under USMCA exemptions, the targeted levies have cut into Canadian exports, particularly steel. 

Mexico, meanwhile, is dealing with a 25% tariff on pharmaceuticals and a controversial “fentanyl tariff,” while also facing the threat of broader 30% duties that Trump has paused until October.

Bilateral trade between Canada and Mexico reached $40.5bn in 2024, but both sides see room for expansion at a time when the Trump administration is redefining long-held trade patterns.

What Does This Mean for Me?

Carney, under domestic pressure for failing to secure tariff concessions, recently scrapped retaliatory measures on US goods in an attempt to revive talks. Analysts suggest closer ties with Mexico could help Canada offset losses, as Mexican exports to the US have been more resilient in 2025. Both governments appear determined not to be pitted against each other in upcoming negotiations, saying togetherness is their best defense against escalating US protectionism.