Mexico and Canada have stepped up efforts to consolidate their bilateral relationship in anticipation of the 2026 review of the United States-Mexico-Canada Agreement (USMCA, known in Spanish as T-MEC). Their meeting in Mexico City last week, where President Claudia Sheinbaum hosted Canadian Prime Minister Mark Carney, showcased shared priorities in trade and security, but also reflected the growing uncertainty caused by Washington’s protectionist stance under President Donald Trump.

At the Palacio Nacional, both leaders unveiled a Plan of Action Mexico-Canada 2025-2028, which includes investment commitments in ports, railways, aerospace and energy. The plan also addresses security and environmental cooperation, with Ottawa noting that bilateral trade opportunities would be expanded in sectors such as construction, agriculture and energy.

Historically, economic ties between Mexico and Canada have been modest compared with those each maintains with the United States. According to the New York Times, Canada represented just 3% of Mexico’s exports last year, while Mexico accounted for only 1% of Canada’s export market. Nevertheless, both governments see scope for diversification: Mexico is pushing for greater Canadian investment in agribusiness and energy, while Canada is promoting agricultural sales and natural gas exports to Mexico.

Trump’s aggressive trade policy has placed both governments in a defensive position. But his announcement of tariffs on Mexican and Canadian goods, 25% in most cases and 50% on semi-finished metals, has been read less as an economic measure than as a negotiating tactic. The objective is not the tariffs themselves, which industries on both sides of the border have already partly absorbed, but the leverage they create in pushing Mexico and Canada to concede on migration, security and regulatory standards. In practice, the measures serve as political pressure points rather than a genuine attempt to rebalance trade.

For Sheinbaum and Carney, unity is essential. In her press conference, the Mexican leader stated that “the best way to compete with other regions of the world is to remain in the USMCA”. Carney, meanwhile, warned against “temptations of bilateralism” and advocated instead for what he called a “strategic partnership anchored in prosperity, security, inclusivity and sustainability”.

Security cooperation formed a central part of the agenda. Sheinbaum noted that Canada’s expertise in cyber security could strengthen Mexico’s investigations, while both leaders acknowledged the challenge of tackling fentanyl trafficking and precursor chemicals. These initiatives respond in part to Washington’s long-standing pressure on regional security but were presented as autonomous bilateral commitments.

Yet analysts suggest that the balance of power within the agreement remains skewed towards Washington. “When the United States treats its partners as adversaries, they begin to act like allies,” observed Daniel Trefler, an economist at the University of Toronto, in comments to the New York Times.

Consultations on the treaty have already begun in each country. According to forecasts cited by El Economista, the USMCA is likely to survive in modified form, with stricter rules of origin and reinforced labour and environmental provisions. For now, the rapprochement between Mexico and Canada signals both a defensive response to US pressure and a pragmatic bid to stabilise their own economies ahead of potentially fraught negotiations.