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Tariffs

Mexico and Canada Seek Common Ground Amid US Trade Tensions

Strategic Insights

— 2 min read

Mexico and Canada, long viewed as distant partners, are now exploring ways to collaborate as they face increasing trade pressure from their powerful neighbor, the United States. With President Trump's new tariffs and threats to their countries' sovereignty, Canada's foreign affairs minister, Anita Anand, and finance minister, François-Philippe Champagne, led a delegation to Mexico to meet with President Claudia Sheinbaum and prepare for a fall visit by Prime Minister Mark Carney of Canada. The two nations are seeking to reset their relationship and compare notes on how to deal with the aggressive Trump administration.

Key Takeaways:

  • Mexico and Canada have historically had distant economic and cultural ties, with Mexico accounting for only 1% of Canadian exports last year.
  • Canada represents around 3% of Mexico's export market, making the two nations' relationship "a ménage à trois made out of convenience, not love" as described by Antonio Ortiz Mena, a professor at Georgetown University.
  • Despite their history of mistrust, Canada and Mexico are seeking to collaborate on trade and economic issues due to concerns about the unpredictable US.
  • Arturo Santa-Cruz, an expert on North American relations at the University of Guadalajara, noted that "what we have in common right now is a nefarious neighbor," referring to the United States.
  • The two nations are exploring ways to maintain their trade deal, the USMCA, and navigate the upcoming review of the agreement.
  • Analysts and businesses see hope for better trade, noting that President Trump has at least somewhat respected the pact from his first term, with nearly all exports traded under the deal being free of tariffs.

Statistics:

  • Mexico accounted for 1% of Canadian exports last year.
  • Canada represents around 3% of Mexico's export market.
  • The effective tariff rate for Canada and Mexico under the US presidential exemption is around 13%.
  • Without the exemption, the tariff rate would increase to around 40% for Canada and 32% for Mexico.
  • The USMCA review is set for next year.

Sources:

  • "A Very Smart Bear on Ice", article in The New York Times, no author or date mentioned.
  • Interview with Anita Anand, foreign affairs minister of Canada.
  • Interview with François-Philippe Champagne, finance minister of Canada.
  • Article in The New York Times about negotiations between Canada and Mexico, no date.
  • Interview with Arturo Santa-Cruz, expert on North American relations at the University of Guadalajara.
  • Interview with Jorge Schiavon, vice president of the Mexican Council on Foreign Affairs.
  • Article in The New York Times about the impact of tariffs on trade between the US, Canada, and Mexico, no date.
  • Study by Moody's Analytics on the effective tariff rate for Canada and Mexico, no date.

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