Tariffs: Canada and Mexico close ranks against Trump’s protectionist srategy
As the review of the United States–Mexico–Canada Agreement (USMCA, also known as CUSMA) approaches next year, Ottawa and Mexico City have made their intentions clear: they want to speak with one voice to rebalance the terms of a partnership strained by Donald Trump. Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney met in Mexico City to develop a joint strategy in response to Washington’s protectionist stance.
Since his return to the White House, Donald Trump has toughened his approach toward America’s neighbors. Heavy tariffs already affect steel, aluminum, automobiles, and certain agricultural products, despite the exemptions provided under the USMCA. With tariffs reaching up to 35% for Canada and 25% for Mexico, these measures are weakening the competitiveness of local industries.
Sheinbaum and Carney therefore intend to present a united front to convince Washington that North America’s prosperity depends on balanced integration, not unilateral tariff barriers. “We are stronger together,” summarized the Canadian leader, calling for a renewed spirit of trilateral cooperation.
A successor to NAFTA, the USMCA has been the foundation of North American trade since 2020. It is vital for both partners: nearly 80% of Mexican exports and 75% of Canadian exports go to the United States. Yet Donald Trump is pushing to renegotiate the agreement on terms more favorable to U.S. industries.
Beyond economics, the White House now links tariff concessions to politically sensitive issues such as the fight against illegal immigration and drug trafficking. This conditionality is causing friction in both Ottawa and Mexico City, and threatens the stability of regional value chains.
he meeting in Mexico City also sought to address an imbalance: while trade in goods between Mexico and the United States reached $763 billion in 2024 (compared to $762 billion between Canada and the United States), Canada–Mexico bilateral trade remains capped at $31.8 billion.
Aware of this weakness, Sheinbaum and Carney announced a Canada–Mexico action plan to boost investment and streamline trade by relying more heavily on their respective ports. The goal: to reduce logistical dependence on U.S. infrastructure and to create new trade routes.
What’s at stake for businesses?
For industries such as automotive, steel, and agri-food, the coming months will be decisive. Maintaining punitive tariffs would weigh heavily on exporters’ competitiveness while raising costs for American importers. Conversely, a fairer renegotiation could pave the way for greater predictability of trade flows—a crucial factor in securing supply chains.
The looming showdown goes beyond the mere question of tariffs: it is a real-life test of the future of North American economic integration. By tightening their ties, Canada and Mexico are sending a clear message: only balanced cooperation will allow the region to remain competitive against Europe and Asia.
