Canada scrambles to mend ties with Mexico after relations disintegrated over Trump’s trade strategy; Prime Minister Carney has reached out to Mexican President Sheinbaum, and senior Ministers have travelled to Mexico to ease tensions; the effort comes as tariffs on Canadian goods rise.
Prime Minister Mark Carney is scrambling to save his country’s relationship with Mexico after it disintegrated late last year when Canadian officials suggested they would be better off negotiating a trade deal with the Donald Trump administration alone.
Mr. Carney attempted to break the ice in a phone call with Mexican President Claudia Sheinbaum in July by complimenting an indigenous-made soccer ball she had gifted him at their last meeting and saying he hoped to visit Mexico soon.
The warm overture highlights Canada’s attempt to repair the damage after a string of public slights by Canadian officials, including Ontario Premier Doug Ford, who earlier said that any comparison of Canada to Mexico was “the most insulting thing I’ve ever heard.”
Mexico and Canada are in many ways natural allies. They’ve benefited from trilateral trade deals with the U.S. for 31 years: first the North American Free Trade Agreement in 1994 and the U.S.-Mexico-Canada Agreement, which replaced it in 2020.
But the relationship has been beset by allegations of betrayal on both sides and memories of fraught negotiations with Mr. Trump. Top officials virtually stopped talking in November after former Canadian Prime Minister Justin Trudeau mused about cutting a trade deal with the U.S. without Mexico, suggesting the U.S. and Canada were more aligned on issues like China.
A few days later, Mr. Trudeau flew to Mar-a-Lago for a surprise visit with Mr. Trump, stunning Mexican officials. It seemed as if Canada had already developed a strategy for dealing with Mr. Trump while Mexico was wringing its hands, one Mexican official said.
An infuriated Ms. Sheinbaum directed her lieutenants to stop dealing with the Canadians, at least until Mr. Trudeau left office, according to the official.
Nine months later, Canada finds itself on the back foot with Mr. Trump, while Mexico is reveling in its relative success. Last week, Mr. Trump gave Mexico a 90-day pause on new tariffs going into effect, keeping the rate at 25%, while raising tariffs on Canada to 35%. Now, in a remarkable about-face, Canadian officials are on a campaign to win back Mexico’s favour and save the trilateral trade deal Mr. Trudeau suggested he was willing to ditch, according to two people with knowledge of the countries’ tense relationship.
That treaty continues to shield a large number of Canadian and Mexican exports to the U.S. from Mr. Trump’s latest rounds of tariffs.
Mr. Carney said on Tuesday that “it’s important to preserve” the trilateral agreement while Canada’s Foreign Minister and Finance Minister travelled this week to Mexico for a two-day visit with top officials. “It is extremely important for Canada to have a resilient relationship with Mexico, and indeed, I’m here to kick start that relationship,” Canadian Foreign Minister Anita Anand said.
Ms. Sheinbaum, on X, reiterated that message. “We’re strengthening the relationship between our countries.”
‘Look in the mirror’
Whether they repair their partnership and become a tightly-knit bloc in negotiations with U.S. will have lasting consequences not only for the three countries but the thousands of companies that depend on free trade in the region, three trade analysts said.
“The big question I have is whether there’s a real sense of communication or coordination between Mexico and Canada,” said Kenneth Smith Ramos, a former trade negotiator for Mexico. “I think both are operating bilaterally with the U.S., and that’s it.”
He said Mexico saved Canada from being ousted from the United States-Mexico-Canada Agreement (USMCA)when Canadian and U.S. negotiators got into a “severe fight” during negotiations in 2018.
“Mexico insisted that the agreement remain trilateral,” said Mr. Smith, who represented Mexico in those negotiations, adding it’s that history that likely made Mexican officials especially bitter when Canada appeared to spurn Mexico to curry favour with Mr. Trump.
A Canadian source involved in the 2018 talks sharply disputed that characterisation.
“The Mexican team went behind our back and negotiated their own bilateral deal with the U.S. Trump then used that to pressure Canada to make concessions,” said the source.
The source said the bad blood with Mexico stemming from the 2018 negotiations is part of the reason Canadian officials expressed interest last year in a bilateral deal with the U.S.
“If there are Mexicans who feel Canada betrayed them, they should look in the mirror.”
Trading barbs
After Mr. Trudeau came away from Mar-a-Lago empty-handed, the relationship became openly hostile with him and Mr. Trump trading barbs. Ms. Sheinbaum, meanwhile, insisted on staying on Mr. Trump’s good side, virtually at any cost, according to three people familiar with her strategy.
As the Canadians fell into a deeper rut with Mr. Trump, Mr. Carney sought to make amends with Mexico by inviting Ms. Sheinbaum to attend the Group of 7 summit in Canada.
Mr. Carney’s invitation and Ms. Sheinbaum’s attendance appeared to be a reset of sorts in the two countries’ relationship, said Pedro Casas, CEO of the American Chamber of Commerce of Mexico.
Whatever her reservations about Canada, Ms. Sheinbaum has made clear she is completely invested in saving the trilateral trade deal with it and the U.S. If the three countries fail to renew the pact next year, the treaty will automatically expire in 2036, creating a potentially disastrous economic blow to Mexico.
U.S. Secretary of Commerce Howard Lutnick has privately raised the idea of ditching the agreement in favour of a bilateral trade deal with Mexico, according to the Mexican official — a scenario the person said Mexico is not keen to pursue.
“Mexico knows very well that if we try to go head-to-head, toe-to-toe with Washington the asymmetry in the negotiations is going to favour the U.S,” said former Mexican trade negotiator Juan Carlos Baker. “It’s always better to have a three-player game.”
