OTTAWA — With trade talks stalled with the Trump administration, Canada is turning its focus to deepening ties with Mexico.
Prime Minister Mark Carney dispatched two of his top Cabinet members to Mexico City for meetings this week with President Claudia Sheinbaum and top officials and business leaders.
Canada is playing its energy card in Mexico as part of a strategy to diversify economic relations as a bulwark against Donald Trump’s tariffs, which the president hiked to 35 percent last week after his Aug. 1 deadline for a new deal passed without agreement.
“It’s no secret that Canada is an energy powerhouse and that we have the ability to supply energy to willing countries,” Foreign Affairs Minister Anita Anand told POLITICO from Mexico City.
Canada’s Mexican charm offensive underscored the imperative for Carney’s government to shore up relations with Mexico ahead of the upcoming review of the United States-Mexico-Canada Agreement. Carney insists the pact provides tariff-free trade for 85 percent of Canada’s exports to the U.S. despite the 35 percent tariff imposed last Friday.
There are no guarantees Trump will continue to honor the USMCA as tensions rise.
While Anand and Finance Minister François-Philippe Champagne were making the rounds in Mexico, a top White House official accused Ottawa of cozying up to China. Canada and China are the only two among roughly 90 countries to impose retaliatory tariffs on the U.S.
Stephen Miran, chair of the White House Council of Economic Advisers, told CNBC on Wednesday that “things are looking very promising” for finalizing a trade deal with Mexico after Trump gave the country a 90-day extension.
“Canada needs to get its act together,” Miran said. “I think Canada has decided it would rather be similar to China and retaliate against the United States.”
Anand dismissed Miran’s criticism.
“Negotiations between the United States and any other country are not comparable to Canada’s negotiations with the United States,” Anand said. “You can’t take a … playbook from one country and simply apply it across the board to other countries.”
She said Canada-U.S. relations in security and defense remain strong, but she conceded: “In every relationship, there are hills and valleys.”
In Mexico City this week, Anand and Champagne devoted two days to revitalizing two-way collaboration on investment and energy.
Anand said their 75-minute meeting with Sheinbaum on Tuesday opened doors to further talks with several of her senior Cabinet members and additional meetings with top executives from Mexican firms and Canadian companies in Mexico.
Spurring investment in Mexican energy infrastructure projects, including pipelines and ports, was a major topic, Anand told POLITICO. That included finding investment opportunities for Canada’s “Maple 8” pension fund group of companies, which has more than C$2 trillion in assets.
“We know that the Maple 8 pension funds are world-renowned because of their infrastructure investments in countries like Australia and Finland and Germany and India. The country of Mexico is ripe for additional investments,” Anand explained.
While the Anand-Champagne visit was about doing some necessary spadework in anticipation of a visit by Carney to Mexico later this year, it was all about setting the proper conditions between Canada and Mexico ahead of the USMCA review.
Anand said the review would likely begin next year, as originally envisioned in the six-year sunset clause in the 2020 pact.
While that’s consistent with what Carney said earlier this week, it runs counter to what Canada-U.S. Trade Minister Dominic LeBlanc recently told POLITICO. After meeting Mexican officials in Washington last week, LeBlanc said the USMCA review could start as early as this fall.
Ontario Premier Doug Ford is pushing for a quick start to the USMCA review because of one persistent and unpredictable threat.
“At any given time, President Trump — not that he even follows the rules — he can pull the carpet out from underneath us on CUSMA tomorrow with one signature,” Ford told reporters at Queen’s Park in Toronto.
“So let’s be prepared. I think it’ll be coming in November. He’s going to come at us with double barrels, so we better be ready and throw everything and the kitchen sink at this.”
