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

Canada’s Prime Minister Mark Carney delivers opening remarks at the Liberal caucus in Edmonton on Sept 10. (AP)

TORONTO, Sept 18, (AP): Canadian Prime Minister Mark Carney heads to Mexico on Thursday in an effort to diversify trade as America’s neighbors brace for a review of the free trade deal with United States. The United States-Mexico-Canada trade pact, or USMCA, is up for review in 2026. More than 75% of Canada’s exports and more than 80% of Mexico’s go to the US Canadian Sen Peter Boehm said Carney and Mexican President Claudia Sheinbaum will commiserate about US President Donald Trump.

“What are they hearing from the Americans, what we are hearing. It’s an opportunity to talk about how to handle the US administration going forward,” Boehm said. Carney is looking to improve relations with Mexico during his two-day visit after some of Canada’s provincial premiers talked last year about cutting Mexico out of any new free trade deal with the US Trump lumped Canada in with Mexico on fentanyl smuggling and promised sweeping tariffs on both countries.

Ontario Premier Doug Ford said then that Trump comparing Canada to the Mexico was “the most insulting thing I’ve ever heard from our friends and closet allies, the United States of America.” Boehm said the comments by the premiers, which he deemed out of their lane, upset the Mexicans. “The Mexicans are particularly sensitive on these matters and there was concern about that, no doubt,” Boehm said.

Boehm represented the Canadian government when Sheinbaum was sworn in as Mexico’s president last year and is pushing for more engagement with Mexico. He said relations recently improved, noting Mexico appreciated Carney inviting Sheinbaum to the G7 summit in Alberta in June. Carney also sent his foreign minister as well as his finance minister to meet with Sheinbaum in August.

“A lot of people don’t realize that we trade more with Mexico than we do with the entire European Union, all of the Europe, including the UK,” Boehm said. “It’s a pretty big deal for us.” Mexico is Canada’s third-largest trading partner after the US and China. Canada was Mexico’s fifth-largest trading partner in 2024. But trade with the US remains paramount for both countries and preserving the free trade pact will be critical.

A key exemption for Canada and Mexico shields the vast majority of goods from the punishing duties. Canadian and Mexican companies can claim preferential treatment under the USMCA. But Trump has some sector-specific tariffs, known as 232 tariffs, that are having an impact. There is a 50% tariff on steel and aluminum imports.