Canada and Mexico Forge Stronger Ties Amidst US Trade Uncertainty
Mexico and Canada are deepening their economic and security cooperation as they prepare for a critical review of the Canada-United States-Mexico Agreement (CUSMA) in 2026. This move comes as both nations navigate ongoing trade tensions and potential tariff threats from the US under the Trump administration.
A United Front Against Potential US Tariffs
Recent meetings between Mexican and Canadian officials, including Economy Minister Marcelo Ebrard and Canadian Trade Minister Dominic LeBlanc, underscore a commitment to strengthening bilateral ties. These discussions took place following a broader agreement between Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney to develop a plan for increased cooperation. The goal is to present a unified front as CUSMA faces potential revisions.
Canada is Mexico’s third-largest trading partner, following the US and China, while Mexico ranks as Canada’s fifth-largest. However, both countries overwhelmingly rely on trade with the United States, making the future of CUSMA paramount. The agreement is seen as vital for economic stability in all three nations.
Security Concerns Drive Collaboration
Beyond trade, security has emerged as a key area of collaboration. Canadian officials emphasized the need for both countries to prepare for “difficult moments” in the 21st century, highlighting the importance of joint efforts in trade, investment, and security. Specifically, there’s a push to enhance information sharing between security agencies and military organizations.
Mexico has prioritized curbing the flow of illegal weapons, and officials see increased cooperation with Canada as a beneficial step. This collaboration is particularly relevant given recent security incidents, such as the kidnapping of ten Mexican miners working for Canadian company Vizsla Silver in Sinaloa. Five of those miners have since been found deceased.
A New Action Plan for 2025-2028
In September 2025, Mexico and Canada unveiled a joint action plan for 2025-2028. This plan focuses on enhanced cybersecurity coordination and collaboration on locating, prosecuting, and extraditing individuals considered “priority targets.”
Did you understand? Trade between Canada and Mexico was valued at C$56 billion in 2024.
Trump’s Stance and the CUSMA Review
The upcoming CUSMA review in 2026 is occurring against a backdrop of renewed trade skepticism from former President Donald Trump. He has previously labeled the deal “transitional” and hinted at potential changes. Trump has also imposed tariffs on both Canada and Mexico, including a 50% tariff on Canadian steel and a 25% tariff on some Mexican pharmaceuticals, as well as a “fentanyl tariff” on Mexico.
Pro Tip: Businesses engaged in cross-border trade with Canada and Mexico should closely monitor developments related to the CUSMA review and potential tariff adjustments.
The Impact of US Tariffs
The US has justified tariffs on both countries citing border security concerns and the need to combat the flow of fentanyl. However, critics argue that these tariffs harm businesses and consumers on both sides of the border. Trump’s previous use of tariffs has demonstrated a willingness to leverage trade as a negotiating tactic.
Frequently Asked Questions
Q: What is CUSMA?
A: CUSMA, or the Canada-United States-Mexico Agreement, is a trade agreement that replaced NAFTA.
Q: When is the CUSMA review scheduled to begin?
A: Formal talks to review CUSMA will launch in mid-January 2026.
Q: What are the main concerns regarding the CUSMA review?
A: Concerns center around potential changes proposed by the US, particularly under the Trump administration, and the possibility of increased tariffs.
Q: What is the focus of the new Canada-Mexico action plan?
A: The plan focuses on cybersecurity, extradition processes, and enhanced security cooperation.
As Canada and Mexico strengthen their partnership, they are positioning themselves to navigate the uncertainties of the evolving trade landscape and safeguard their economic interests. The coming months will be crucial as they prepare for the CUSMA review and potential negotiations with the United States.
Explore further: Read more about the potential impacts of the CUSMA review here.
What are your thoughts on the future of trade between Canada, Mexico, and the US? Share your comments below!
