Canada and Mexico Deepen Trade Ties Amid U.S. Tariff Threats

Canada is deepening trade relations with Mexico under Prime Minister Mark Carney, as renewed tariff threats from U.S. President Donald Trump prompt Ottawa to rethink its economic strategy.

Trade partnerships between the countries have increased in sectors like semiconductors, electric vehicle batteries and agriculture.

Analysts see the shift as mutually beneficial. Canada contributes cutting-edge technology and critical minerals, while Mexico brings skilled labor and industrial infrastructure to the table.

The collaboration is especially evident in agriculture, where Canadian startups — such as Nexus Robotics and Elevate Farms — are introducing vertical farming, drone surveillance, and smart irrigation to boost Mexican crop yields.

Mexican exports to Canada surged 20% in Q1 2025, outpacing growth rate to the U.S. more than fourfold. Yet, Canadian exports to Mexico have declined, raising questions about the balance of trade.

The shift marks a dramatic turnaround. Just a year ago, Canadian ministers like Doug Ford and Danielle Smith were pushing to eject Mexico from the USMCA over alleged backdoor Chinese imports. Now, with Trump’s tariff threat back in play, the rhetoric has pivoted — from trade war threats to strategic cooperation.