The Current - How can Canada have closer trade ties with Mexico?

Episode Date: August 7, 2025

When Canada was imposed with 35 percent tariffs by U.S. President Donald Trump last week, Mexico received a 90-day extension on trade talks. So, in the face of two very different trade talks with the U.S., Canada is working to strengthen its economic ties with Mexico.  We discuss what closer trade ties between Canada and Mexico could entail, and how Canada should adjust its approach to trade talks with  PresidentTrump.

We're in the midst of the dog days of summer. And it's called that because during this period, Sirius, the dog star, rises with the sun in the morning. Not because it feels like several dogs are breathing their humid breath on you all the time. Can you tell he's a cat person? Hello, I'm Neil Kerkstel. And I'm Chris Houghton. We're the co-hosts of As It Happens.

But throughout the summer, some of our wonderful colleagues will be hosting in our place. We will still be bringing you conversations with people at the center of the day's major news stories here in Canada and throughout the world. You can listen to As It Happens wherever you get your podcasts. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. It's a tale of two very different trade negotiations. Last week, U.S. President Donald Trump imposed a 35% tariff on Canada.

At the same time, he gave Mexico a 90-day extension on trade talks. This week, Canada's finance minister, Francova-Fedip Champagne, and Foreign Affairs Minister, Anina Anand, were in Mexico meeting with Mexican president, Claudia Shanebaum. They're hoping to strengthen economic ties between the two countries. There's a recognition also that Mexico plays an extremely important role in the global economy. And we want to make sure that from a Canadian standpoint, we're recognizing that and we're leveraging it for the advantage of the Canadian domestic economy.

So what could closer trade ties look like between Mexico and Canada, and how likely is that to happen? And what is it about Mexico's strategy for handling trade talks with the Trump administration that's worked, at least so far? Emiliano Rodriguez Mega is a New York Times reporter based in Mexico City. Good morning. Good morning, Sean. Mexican President Claudia Shane Baum talked with U.S. President Donald Trump last Thursday in advance of the August 1st trade deal deadline. And after that conversation, Donald Trump wrote on social media and his words, more and more we are getting to know and understand each other. What has Claudia Shanebaum's strategy been?

Yeah, I mean, I think Claudia Shanebaum's strategy has shifted. I think she did start using a more confrontational tone when these tariffs were first announced. She even poked fun at President Trump on some issues. For example, when he signed his executive order about renaming the Gulf of Mexico, she suggested the U.S. should be renamed Mexican America. But that, I mean, that strategy changed, as she learned early on, that confrontational tactics would only anger President Trump, really. And since then, Mexico and the U.S. have struck a, you know, more conciliatory tone. Mexico chose to negotiate, and I understand that Canada chose to negotiate as well, but it also chose to retaliate. Mexico has not retaliated in any way to President Trump's tariffs or even other measures that he has put forward.

So I think that that's a big difference. Up until, you know, recently, as you said, despite the very different approaches that Mexico and Canada had followed, We were both in the same boat. That doesn't seem to be the case anymore. She's been called a cool head. What is it about her personality that seems to be effective here? I mean, I think, you know, President Schaim, she's a trained scientist. She's considered to be like less charismatic and in some way like less explosive.

than her predecessor, Andres Manuel Lopez-Obrador. And I think she's proven the point that she's not trying to pick a fight with the United States. But despite that, she's also like tried to be firm unlike certain non-negotiables for Mexico. For example, she recently recalled a call that she had with President Trump in which he, offered to send U.S. troops to Mexican territory to fight the drug cartels. And she said, no, that that would be in violation to Mexican sovereignty. She said that Trump understood that, of course, days later, we saw President Trump say that she was too afraid of the cartels. But in some ways, they, I mean, the two leaders have managed to forge a relationship of respect, at least publicly.

In a post on truth social, Donald Trump wrote the complexities of a deal with Mexico are somewhat different than other nations because of both the problems and assets of the border. What is Donald Trump asking Mexico to do on its border with the U.S.? I mean, one thing that's true is that these trade talks between Mexico and the United States have been about so much more than just trade. They have involved a lot of issues in terms of migration and security as well. And Mexico has already made a number of major concessions to try to appease President Trump. We saw the Mexican government deploy an additional 10,000 troops, National Guard troops to its northern border. We've seen migration into the U.S. be, you know, significantly curtailed. we have seen fentanyl cissures ramp up.

I think even last month, President Seymont said that they had dropped by nearly 50%, and that Mexican security forces were seizing even more fentanyl and preventing it from being smuggled into the U.S. Mexico has also extradited, I think, 29 cartel bosses to the United States. It's now supposedly negotiating a new security deal. with U.S. officials that might involve intelligence sharing, like more enforcement coordination. So Mexico has done a lot. You know, while some analysts and experts have pointed out that, you know, her ability to kick things down the road is impressive. And the latest example would be this 90-day extension that Mexico got.

That doesn't guarantee Mexico will manage to secure a beneficial deal in the end. and they worry how much more Mexico will have to give until the Trump administration is satisfied. In his first term, Donald Trump famously talked about getting Mexico to pay for a wall on the border. How do you explain the shift in tone from Donald Trump toward Mexico? I mean, I think that's, yeah, I think that's interesting. And I'm not sure I have a clear answer for that. I think part of it has to do maybe with the fact that he, has, you know, recognized how important Mexico is to the U.S. Mexico is the United States' largest trading

partner. Our economies are so deeply integrated that, you know, they are basically inseparable. It would cause a lot of harm to both countries to try to decouple our economies. And so I think maybe in part, President Trump and his team have realized that while they, you know, still have an upper hand when it comes to Mexico, that, you know, maybe a better strategy is to like try to negotiate with them. Here in Canada, there's an elbows-up boycott on American goods and many people will travel to the U.S. right now. How are Mexicans responding to the U.S. and its depend, demands? And what do they think of Claudia Shanebaum's handling of this? I mean, based on what the latest polls say, President Shimon is becoming very popular.

Her approval ratings, some of which go above 70% have soared, and many Mexicans have applauded the way that she's been able to manage President Trump and his threats so far. I think we've also seen some glimpse of a nationalistic movement here in Mexico. the Mexican government has even, like, created an initiative to promote this sort of like made-in-Mexico brand for several companies. But I don't think we've seen exactly the same thing that we've seen in Canada in terms of like, you know, these elbows up strategy and trying to boycott sort of like American companies and not travel to the U.S. and stuff. As I said, like, you know, Mexico heavily relies on the U.S. And many Mexican families know that. So, so yeah.

As we mentioned earlier, Canada's Foreign Affairs Minister Anita Anand, then finance minister Francois Filippe Champagne, were in Mexico this week. And Prime Minister Carney and Mexico is called you a Shanebaum, planning to meet at some point soon. What do we know about what was discussed this week? I mean, we know that. We know that they met with President Shemam, of course, and with several Mexican business leaders. I also know that they met with a number of Mexican ministers.

I think Mexico's economy minister, Marcelo Ebrard, said that he was said to speak with Minister Champagne about the two countries' experiences in dealing with tariffs. Ebrard said that they were going to exchange experiences, you know, that Canada is paying a 35% tariff and Mexico isn't. And he said that the ministers wanted to know how Mexico is getting these results. We know also, as President Seymouth said, yesterday during her morning news conference, that these meetings were in preparation for a future visit by Prime Minister Carney to Mexico. And that they had agreed to sort of like expand trade relations between Mexico and can. Canada, which, you know, we know that they could use some improvement.

Mexico only accounted for 1% of Canadian exports last year, and Canada still represents a small portion of Mexico's export market, slightly over 3%. So closer ties with Canada would also make sense when it comes to something that Mexico has defended, that a strong and United North America is the only way that Mexico, Canada, and the United States can compete economically with other regions of the world. particularly China. So I think we can expect to see some deals moving these countries to that direction. And I think, you know, these meetings are also interesting in the context of the U.S. tariffs because it's just interesting to see that Mexico and Canada are engaging in talks. And as the two countries have sort of like become to realize that the United States is not as reliable as a partner as it used to be, I don't think that we can expect to see, you know, Mexico and Canada sort of like excluding the U.S. in any way from their deals.

But maybe, you know, diversifying their trade relations and like deepening, you know, their commercial relations is something that. that we could expect. Emiliano, thanks for talking to us this morning. Thank you so much, Sean. Emiliano Rodriguez-Mega is a reporter for the New York Times based in Mexico City. This has been the current podcast. You can hear our show Monday to Friday

on CBC Radio 1 at 8.30am at all time zones. You can also listen online at cbc.ca.ca slash the current or on the CBC Listen app or wherever you get your podcasts. My name is Matt Galloway. Thanks for listening. For more CBC Podcasts, go to cBC.ca slash podcasts.