Mexico Says It Reached Agreements With Trump as Canada-U.S. Trade Fight Remains Stalled

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Mexico and the United States appear to be moving closer to a trade understanding just as Canada’s dispute with Washington remains caught in a far more confrontational phase. Mexican President Claudia Sheinbaum said she spoke with U.S. President Donald Trump on Wednesday and that the two leaders reached some agreements, although she stressed that there is not yet a final deal that can be announced.

The contrast with Canada is becoming increasingly difficult to ignore. Ottawa suspended intensive negotiations with Washington in August after rejecting the proposed terms, and both countries have since imposed or announced new trade restrictions. The result is an unusual moment in North American trade: Mexico is publicly describing progress with Trump while Canada, another U.S. partner under CUSMA, remains locked in retaliation and uncertainty.

Mexico Says the Trump Talks Are Moving in the Right Direction

Sheinbaum’s comments offered the clearest indication yet that Mexico believes its separate negotiations with Washington are producing results. She confirmed that she and Trump spoke on Wednesday and said the call went well, with some agreements reached between the two governments. She stopped short of explaining what those agreements covered, however, emphasizing that Mexico would wait until a final package was settled before making a formal announcement.

That distinction matters. Mexico has not announced a completed trade deal with the United States, and Washington has not unveiled a comprehensive new agreement. Instead, the latest development suggests movement inside negotiations that have been underway for months. Reuters reported that officials are working toward an agreement that could potentially be completed before the November 3 U.S. midterm elections, although there is no formal deadline. For businesses operating across the border, even evidence of progress could provide some reassurance after months of tariff uncertainty.

The Latest Call Builds on Months of Bilateral Negotiations

The conversation between Trump and Sheinbaum did not emerge from nowhere. Mexico and the United States have already held multiple rounds of bilateral negotiations connected to the 2026 review of CUSMA, known as USMCA in the United States and T-MEC in Mexico. Earlier rounds covered a remarkably broad agenda, including economic security, agriculture, labour, electronic payment services, automobiles, steel and aluminum.

Those talks have increasingly taken place on separate bilateral tracks rather than with all three North American governments sitting at the same negotiating table. U.S. Trade Representative Jamieson Greer and Mexican Economy Secretary Marcelo Ebrard said after July negotiations that both sides wanted to strengthen North American manufacturing and regional supply chains while preventing countries outside the agreement from improperly benefiting from preferential access. Mexico has repeatedly said it still supports preserving the three-country agreement, even while negotiating directly with Washington on issues affecting Mexican exporters.

Mexico Still Wants Relief on Cars, Steel and Aluminum

Despite the upbeat tone surrounding the Trump-Sheinbaum call, Mexico still has major demands on the table. Sheinbaum said earlier in September that her government wants Washington to lower U.S. tariffs affecting Mexican steel, aluminum and automobiles. Those sectors have been among the most difficult parts of the negotiations because they sit at the centre of Trump’s push to increase manufacturing inside the United States.

Mexico nevertheless enters the discussions with substantial tariff-free access already intact. Mexico’s Economy Ministry said in July that roughly 85% of Mexican exports entering the U.S. market continued to face zero tariffs when they complied with CUSMA rules. That helps explain why Mexico has focused heavily on protecting its existing position rather than fundamentally redesigning the relationship. The remaining tariffs still matter enormously, particularly for industries such as automobiles where factories and suppliers operate through deeply integrated North American production networks.

The Economic Relationship Gives Both Countries Plenty to Protect

The scale of U.S.-Mexico commerce makes a prolonged rupture costly for both sides. U.S. Census Bureau figures show that American companies exported about US$337.3 billion in goods to Mexico in 2025 while importing roughly US$534.3 billion. Combined, that represents more than US$870 billion in two-way goods trade in a single year, before services are included.

Automobiles demonstrate how difficult it would be to cleanly separate the two economies. The U.S. International Trade Administration describes Mexico’s automotive sector as highly integrated with the United States, with some components crossing the border numerous times before a finished vehicle is completed. In 2024, nearly 80% of Mexico’s light-vehicle exports went to the United States, while the auto industry accounted for about 4.5% of Mexico’s GDP. Tariffs applied at different stages can therefore affect manufacturers, suppliers, dealerships and consumers on both sides of the border rather than remaining confined to Mexican factories.

Canada’s Negotiating Track Broke Down in August

Canada entered late summer in a very different position. Prime Minister Mark Carney announced on August 21 that Canada was suspending negotiations after intensive talks failed to produce terms Ottawa considered acceptable. Carney said last-minute changes in Washington’s proposal were unfair and economically damaging, while U.S. officials blamed Canada for walking away from what they described as favourable terms.

The failure was quickly followed by tariffs. Washington imposed 50% duties covering roughly C$28 billion worth of Canadian goods, and Ottawa responded by announcing matching countermeasures. Canada’s Department of Finance later detailed tariffs of 15%, 25% and 50% on C$27.6 billion of U.S. imports, targeting sectors including steel, dairy products, appliances, agricultural equipment, pulp and paper, and electronics. Those Canadian measures took effect September 8, turning an unsuccessful negotiating round into a much more visible trade confrontation affecting businesses in both countries.

Washington Has Since Escalated Pressure on Canadian Products

The dispute did not stop with reciprocal tariffs. On September 8, the White House announced additional restrictions affecting certain Canadian products, with import bans scheduled to take effect September 29. Reuters reported that the measures cover broad categories of Canadian alcoholic beverages, dairy products and motorcycles, while additional products have been subjected to higher tariffs rather than outright prohibition.

Washington says the measures respond to Canadian policies it considers discriminatory toward U.S. exporters. Ottawa disputes the U.S. characterization and maintains that its counter-tariffs are a response to American trade actions. The disagreement illustrates why the Canadian negotiations have proven harder to restart: the dispute now extends beyond a single tariff rate and into competing claims over market access, dairy policies, automobiles and provincial treatment of American products. U.S. and Canadian officials have remained in contact, but a return to the intensive negotiations that ended in August has not been publicly announced.

Canada Remains Far More Exposed to the U.S. Market

For Canada, the economic stakes remain particularly high because the United States still buys the majority of Canadian merchandise exports. Statistics Canada reported that 71.7% of Canadian merchandise exports went to the United States in 2025. That was actually a notable decline from 75.9% in 2024, but it still demonstrates how difficult it would be for Canadian exporters to quickly replace American customers.

There are signs of diversification. Canadian exports to countries other than the United States climbed 17.2% in 2025, while total merchandise trade with non-U.S. countries increased sharply. Yet geography, infrastructure and decades of integrated manufacturing continue to make the American market unusually important. Energy pipelines, auto plants, rail networks and cross-border supply chains were built around continental trade. That means Ottawa can expand commerce with Europe and Asia while still facing significant economic consequences whenever access to the American market becomes more expensive or unpredictable.

CUSMA Is Still Alive, but Its Future Is Less Certain

The disagreement between Canada and Washington is unfolding alongside a larger question about the future of CUSMA itself. During the agreement’s scheduled six-year review on July 1, the Trump administration declined to approve an automatic 16-year extension of the agreement in its existing form. That decision did not terminate free trade across North America, but it moved the agreement into a period of annual reviews while negotiations over possible changes continue.

Under the existing framework, CUSMA can remain in force for another decade without an immediate renewal, giving the three governments considerable time to negotiate. The economic incentive to preserve some form of continental arrangement is substantial: Reuters estimates that the agreement supports roughly US$1.6 trillion in annual trilateral trade. Washington has pushed for changes involving rules of origin, manufacturing and trade deficits, while Mexico and Canada have emphasized the value of maintaining predictable access to the integrated North American marketplace.

Mexico and Canada Are Now Following Very Different Paths

The coming weeks could reveal whether Mexico’s approach produces a concrete deal. Sheinbaum says progress is being made and has specifically identified relief on steel, aluminum and automobiles as Mexican priorities. Reuters reported that officials on both sides see advantages in reaching an understanding before the November 3 U.S. midterms, but Sheinbaum has also made clear that Mexico will not announce an agreement until negotiations are actually complete.

Canada faces a different timetable. Ottawa has said it will not accept a deal simply to meet a deadline, and its retaliation is already in force. At the same time, communication between Canadian Trade Minister Dominic LeBlanc and U.S. Trade Representative Greer has continued, leaving open a route back to negotiations. For now, however, the contrast is striking: two countries covered by the same North American trade agreement are dealing with Washington through increasingly different relationships—Mexico emphasizing negotiating progress while Canada manages an escalating tariff dispute.

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