New Report Details Trump’s Push for a Mexico Energy Deal as Canada Remains Outside Key Bilateral Talks

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A new development in North American trade negotiations is raising fresh questions about Canada’s position as Washington pursues a closer economic arrangement with Mexico.

According to an October 9, 2026, Financial Times report, U.S. President Donald Trump has been pressing Mexican President Claudia Sheinbaum to expand energy partnerships between American and Mexican companies, including potentially larger purchases of U.S. natural gas.

The proposal comes as Washington and Mexico pursue bilateral discussions over trade, tariffs and industrial cooperation, while Canada remains outside those specific negotiations.

For Prime Minister Mark Carney, the challenge extends beyond energy. An agreement between Washington and Mexico could influence the terms of future North American trade arrangements, even though the three-country trade pact remains legally in force.

The growing question is whether Ottawa can protect its interests while its two largest continental partners negotiate separately.

Trump Presses Mexico for New Energy Partnerships

President Donald Trump is reportedly seeking closer commercial ties between American and Mexican energy companies as part of negotiations intended to reshape the countries’ trading relationship. The Financial Times reported on October 9 that Trump raised the subject during a mid-September telephone conversation with Mexican President Claudia Sheinbaum. According to people familiar with the discussions, the American president encouraged additional energy agreements and increased purchases of U.S. natural gas. The proposals form part of Washington’s broader effort to reduce its trade deficit with Mexico while securing new opportunities for American businesses.

The reported discussions are significant because energy has become another negotiating issue alongside automobiles, industrial supply chains and tariffs. However, the existence of presidential-level conversations does not mean a finalized agreement has been reached. Neither government has publicly released a binding energy purchase commitment arising from the reported requests. Sheinbaum confirmed on September 18 that she had spoken with Trump and that trade negotiations were progressing, but declined to disclose specific understandings before a final agreement. Her remarks established that high-level diplomatic contact was continuing, while leaving the precise energy proposals largely undisclosed.

Washington Is Looking to Its $100 Billion South Korea Agreement

One of the most revealing elements of the new reporting is the comparison with Washington’s earlier arrangement with South Korea. According to the Financial Times, Trump discussed the possibility of structuring a Mexican energy agreement around a similar approach. Under the U.S.–South Korea tariff arrangement announced in July 2025, Seoul agreed to purchase approximately US$100 billion worth of American liquefied natural gas and other energy products over four years. The understanding formed part of a larger economic package involving tariffs, investment commitments and market access.

The comparison suggests the White House wants energy purchases to become a measurable component of wider trade negotiations. Rather than negotiating exclusively over import duties, Washington could seek commercial commitments that provide additional demand for American energy producers. However, the South Korean figure should not be mistaken for an amount Mexico has agreed to spend. No equivalent US$100 billion Mexican purchase commitment has been publicly confirmed. Mexico also has a different energy infrastructure and supply relationship with the United States, relying heavily on pipelines rather than the seaborne liquefied natural gas arrangements central to many Asian energy purchases.

Mexico Already Depends Heavily on American Natural Gas

Mexico is already one of the most important foreign customers for American natural gas, making Trump’s reported request particularly consequential. According to the U.S. Energy Information Administration, pipeline exports to Mexico averaged 6.4 billion cubic feet per day in 2024. That volume had increased substantially since 2019 as Mexico expanded the use of natural gas, especially for electricity generation. By May 2025, monthly pipeline exports had reached a record average of 7.5 billion cubic feet per day, demonstrating how closely the countries’ energy infrastructure has become connected.

The October 9 reporting indicated that Mexico already relies on U.S. natural gas for roughly three-quarters of its demand. More recent U.S. Department of Energy figures illustrate the continuing scale of that relationship: American gas exports to Mexico totalled approximately 228.7 billion cubic feet in June 2026 alone. For Mexican factories, power generators and industrial facilities, reliable access to imported gas can be essential for maintaining operations. Additional purchases could benefit U.S. producers, but any agreement would need to address existing consumption, transport capacity and Mexico’s long-term energy needs. A purchasing pledge does not automatically create new demand.

Mexico’s Energy Sovereignty Is a Major Negotiating Obstacle

Trump’s reported proposals touch one of the most politically sensitive areas of Mexico’s economy. President Sheinbaum has made strengthening state-owned energy companies a central part of her administration’s economic strategy. In March 2025, Mexico enacted legislation reinforcing the roles of Petróleos Mexicanos, commonly known as Pemex, and the Federal Electricity Commission, or CFE. The reforms reversed important elements of earlier market liberalization and established that CFE facilities should supply at least 54% of the electricity dispatched to the national grid. These policies reflect the Mexican government’s commitment to maintaining public control over strategic energy assets.

However, Mexico has not completely excluded private investment. Its regulatory framework permits several forms of private electricity generation and partnerships, including arrangements involving CFE. Pemex can also enter mixed contracts with private companies under specified conditions. That creates a possible opening for the arrangements Washington reportedly wants, although political and regulatory constraints remain significant. The challenge for Sheinbaum is balancing investment and infrastructure requirements against promises to protect national energy sovereignty. Any agreement perceived as surrendering control to American companies could create domestic political opposition, even if it offered meaningful economic benefits.

Another Round of Negotiations Has Been Delayed

The energy discussions are unfolding as Washington and Mexico attempt to advance an increasingly complicated trade agenda. Following their third formal bilateral negotiating round in Mexico City in July, U.S. Trade Representative Jamieson Greer and Mexican Economy Secretary Marcelo Ebrard instructed their teams to reconvene in Washington during September. That meeting was subsequently postponed. On September 23, Mexican Deputy Economy Minister Luis Rosendo Gutiérrez said the fourth round could instead take place in October, citing diplomatic scheduling conflicts involving the G20 and other international events.

The Financial Times has additionally reported that Trump’s energy demands contributed to complications surrounding the negotiating timetable. That assessment differs in emphasis from Mexico’s public explanation, which focused on scheduling. Neither account establishes that the energy issue was the sole cause of the delay. Discussions nevertheless continued outside the formal negotiating rounds. On October 1, Ebrard met Greer during the G20 trade ministerial gathering in Milwaukee and said the countries were moving closer on several outstanding issues. The meeting demonstrated that the process remained active, although neither government announced a completed comprehensive trade or energy agreement.

Canada Is Outside the Bilateral Talks but Remains a CUSMA Partner

Canada’s absence from the current U.S.–Mexico discussions is particularly important because the negotiations concern the future of an agreement originally designed around three countries. Washington and Mexico launched their bilateral technical process in March 2026, with formal negotiating rounds subsequently addressing manufacturing, agriculture, labour and trade rules. Canada was not a participant in those sessions. By July, Reuters reported that the Mexican negotiating track was approximately six months ahead of discussions between Washington and Ottawa, according to a Mexican official familiar with the process.

However, being excluded from U.S.–Mexico bilateral meetings is not the same as being removed from the Canada–United States–Mexico Agreement. Canadian Trade Minister Dominic LeBlanc participated in the agreement’s formal trilateral review on July 1 alongside Greer and Ebrard. The existing treaty remains in force, and all three governments retain their respective obligations and rights under it. The concern for Ottawa is more strategic: bilateral understandings reached before broader negotiations could influence the positions Washington and Mexico bring to future three-country discussions. Canada would still have a voice in formal treaty changes, but it could face greater negotiating pressure if major issues were settled elsewhere first.

Carney’s Separate Negotiations With Washington Remain Unresolved

Prime Minister Mark Carney is managing a different negotiating relationship with the Trump administration. On August 21, Carney announced that Canada was suspending trade negotiations with the United States and directing its negotiating team to return to Ottawa. He argued that the two governments had made progress before American negotiators introduced last-minute changes that made the proposed agreement economically unacceptable. Ottawa emphasized that it wanted reliable market access and greater certainty for Canadian businesses, rather than an agreement reached simply to satisfy a deadline.

Washington has disputed Canada’s explanation of the breakdown. On October 8, U.S. Trade Representative Jamieson Greer indicated that the United States was maintaining its negotiating position while continuing regular communication with Canadian officials. He said American representatives remained available for further discussions, suggesting diplomatic contact had not ended despite the suspension of formal negotiations. For Carney, the increasingly active U.S.–Mexico relationship creates another complication. Canada must protect its own manufacturing, energy and trade interests while monitoring negotiations that could establish new expectations for North American market access. The challenge is not merely returning to discussions, but ensuring that any eventual agreement reflects Canada’s economic priorities.

America’s Trade Deficit With Mexico Is Driving Tougher Demands

The Trump administration’s emphasis on energy purchases is closely connected to its broader objective of reducing the American trade deficit. According to the Office of the United States Trade Representative, U.S. goods imports from Mexico reached approximately US$534.3 billion in 2025, compared with US$337.3 billion in American goods exports. That produced a goods trade deficit of roughly US$197 billion. The administration has repeatedly presented such imbalances as evidence that existing trading arrangements need to be renegotiated, particularly when imported products compete with American manufacturing.

Increasing Mexico’s purchases of U.S. natural gas could help expand American exports, but the economic relationship is more complicated than the goods deficit alone suggests. The United States also recorded a services trade surplus of approximately US$13.1 billion with Mexico in 2025, illustrating the importance of separating goods and services statistics. Furthermore, greater energy purchases would not necessarily eliminate structural differences in trade flows. Mexico exports substantial quantities of vehicles, machinery and other manufactured products to its northern neighbour. For Washington, an energy agreement could deliver a measurable commercial commitment while broader negotiations address manufacturing, market access and investment rules.

Automotive Rules and Industrial Supply Chains Remain Central

Although Trump’s latest reported demands focus on energy, the automotive industry remains central to the negotiations. In March, American and Mexican officials began formal technical discussions about strengthening North American manufacturing and reducing dependence on materials originating outside the region. Subsequent negotiating rounds expanded into automotive rules of origin, steel, aluminum and economic security. Washington’s objective is to ensure that more of the economic benefits associated with North American trade remain within the participating countries, particularly through greater domestic and regional production.

For automakers, changes to origin requirements could influence decisions about where components are manufactured and assembled. A supplier operating facilities in Ontario, Michigan and northern Mexico may rely on materials crossing borders several times before a completed vehicle reaches a dealership. A bilateral arrangement that changes tariff relief or industrial requirements could alter that company’s calculations, even if Canada is not directly negotiating the provisions. In September, Mexican officials identified relief from American tariffs on automobiles, steel and aluminum as a priority. However, the countries have not publicly confirmed final terms resolving these disputes. Energy cooperation may create another bargaining opportunity, but it does not remove the challenges facing integrated manufacturing networks.

Canada’s Existing Energy Relationship With America Remains Enormous

Canada’s exclusion from the latest bilateral discussions does not erase its substantial position in the North American energy market. According to the Canada Energy Regulator, Canadian exports of crude oil, refined petroleum products, natural gas and natural gas liquids to the United States were valued at approximately C$157.5 billion in 2025. Canada supplied 63.4% of the crude oil imported by the United States and nearly all its natural gas imports that year. The countries also maintain extensive electricity connections, with 86 international power lines linking Canadian provinces and American states.

These figures demonstrate why American energy negotiations with Mexico should not automatically be interpreted as an attempt to replace Canada as an energy supplier. The two relationships serve different purposes. Canada supplies large volumes of crude oil and natural gas to American markets, while Mexico imports substantial quantities of American natural gas for electricity generation and industrial consumption. A larger U.S.–Mexico gas arrangement could strengthen American energy exports without directly reducing existing Canadian deliveries. Nevertheless, Ottawa has reason to monitor any agreement that changes regional investment incentives, pipeline development priorities or the negotiating framework governing North American energy trade.

Canada and Mexico Are Still Strengthening Their Own Economic Partnership

Despite the separate negotiations with Washington, Canada and Mexico continue to maintain a significant bilateral economic relationship. In May 2026, Mexican Economy Secretary Marcelo Ebrard and Canadian Trade Minister Dominic LeBlanc welcomed the conclusion of a Mexican trade mission to Toronto and Montréal. Business representatives from ten priority sectors participated in meetings and investment activities. More than ten agreements and memoranda of understanding were announced, including a C$200 million investment by Mexican food company Grupo Bimbo to modernize its Canadian facilities.

The two governments also reaffirmed their commitment to the Canada–Mexico Comprehensive Strategic Partnership and an action plan launched by Carney and Sheinbaum in September 2025. Their cooperation covers agriculture, energy, innovation, natural resources, transportation infrastructure and security. According to the Canadian government, two-way merchandise trade between Canada and Mexico approached C$62 billion in 2025. These relationships provide Ottawa with important diplomatic and commercial connections even as Mexico negotiates independently with the United States. There is no evidence that the reported American energy proposal requires Mexico to abandon its partnership with Canada. Mexico can pursue advantages in Washington while continuing to support three-country economic cooperation.

CUSMA’s Future Will Depend on More Than One Energy Agreement

The broader uncertainty surrounding the Canada–United States–Mexico Agreement helps explain why these bilateral negotiations have attracted so much attention. The trade pact entered into force on July 1, 2020, and underwent its first mandatory six-year joint review on July 1, 2026. Washington declined to extend the agreement in its existing form, while Canada and Mexico supported renewal. However, that decision did not terminate CUSMA. Under its provisions, the agreement remains in effect while the countries conduct annual reviews, potentially continuing until its scheduled expiration in July 2036 unless all three governments agree to extend it.

The next stages are already taking shape. On October 2, the U.S. Trade Representative opened a public consultation process ahead of the 2027 review, with comments due by January 12, 2027. Meanwhile, Washington and Mexico continue pursuing possible bilateral arrangements, and Canada’s separate negotiations remain unresolved. Trump’s reported energy demands may offer another route toward agreement with Sheinbaum, but no completed energy deal has been publicly confirmed. For Carney, the central challenge is ensuring that Canada’s interests remain influential as the negotiating landscape evolves. The future of North American trade will depend not only on which governments reach agreements first, but on whether their separate commitments can ultimately fit within a stable three-country framework.

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