What Carney’s meeting with Sheinbaum could mean for North American trade

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Prime Minister Mark Carney is embarking on a pivotal meeting with Mexican President Claudia Sheinbaum on Thursday, just as the United States officially launches the process to review the North American trade agreement.

The Office of the U.S. Trade Representative will seek public comments on the Canada-U.S.-Mexico Agreement (CUSMA) over 45 days and has scheduled a public hearing in November.

Public consultation is required by law and is a clear sign that the Trump administration is preparing to renegotiate, not just review, the trilateral agreement, says Eric Miller, president of Rideau Potomac Strategy Group.

“They’re trying to get stakeholders a list of all the things they have concerns about. It doesn’t mean all of them become priorities, but they’re starting with a big list and are going to shrink it down to a smaller list,” said Miller, whose client list includes Canadian exporters.

Under the current agreement, Canada’s trade with the U.S. is 85 per cent tariff free, but that could change when CUSMA expires next June.

“Donald Trump doesn’t have a commitment to a bigger vision of North American collaboration,” Miller said.

Diversifying trade with Mexico

Squeezed by Trump’s sectoral tariffs on steel, aluminum and autos, Canada’s GDP shrunk by 1.6 per cent in the second quarter of 2025.

It’s under this pressure that Carney is meeting with Sheinbaum to strengthen their bilateral relationship and increase trade.

Mexico is Canada’s third biggest trading partner and last year, the two countries did $56 billion in imports and exports.

Foreign Affairs Minister Anita Anand and Minister Dominic LeBlanc, the government’s point person for U.S. trade negotiations, will also be part of the meetings in Mexico City.

Ahead of the prime minister’s 36-hour whirlwind trip, senior government officials told reporters in a briefing that Carney and Sheinbaum will hold one-on-one meetings, followed by a working lunch with their cabinet ministers and secretaries.

A new strategic partnership will be signed that would include commitments for more frequent high-level contact between the two governments.

This is the first time a prime minister has visited Mexico City for an official bilateral meeting since 2017.

The prime minister will also visit a train terminal to watch Canadian Pacific Railway offload a delivery of Canadian wheat, and host a reception to connect business leaders from both countries.

‘Aligning’ interests

Goldy Hyder, CEO of the Business Council of Canada, says the government needs to use the meeting to better position itself for the CUSMA review by working “in tandem with Mexico to align” interests.

Hyder says Canada also needs to pitch itself as an “investment destination” for mining and energy, as well as for developing port infrastructure.

According to John Boscariol, who leads the International Trade and Investment Law Group at McCarthy Tetrault, Canada only represents five per cent of Mexico’s international trade.

As Canada looks to diversify its trade, Boscariol says Mexico is the “natural next best trading partner to the United States.”

Boscariol sees an opportunity for Canada to sell more auto parts to Mexico, along with agricultural products such as potash.

Co-operation vs. competition

But the two countries cannot replace the U.S. with each other.

Duncan Wood, with Washington-based Hurst International Consulting, has researched Mexican trade and supply chains. Wood says as CUSMA negotiations progress, tensions between the two smaller partners could increase.

“I find it very difficult to imagine how the two countries are going to find a lot of common ground. There’s so much pressure right now pushing them away from each other as each one tries to secure preferential treatment from Washington.”

Wood says Carney and Sheinbaum need to discuss aligning their policies on China if they want a stronger position when CUSMA is renegotiated.

“The big thing that matters in Washington is if you can show how Mexico and Canada can help with the United States’ geopolitical competition with China.”