How Trump Is Splitting North America's Trade Bloc

When Canada and Mexico sent a joint letter to Washington on June 1 requesting a 16-year extension of the USMCA, it looked like the two neighbors were finally forming a common front against Trump's trade offensive. ^[1] They were not. That letter was the high-water mark of North American solidarity — and it has been receding ever since. The two countries have responded to the same pressure in opposite ways. Mexico is hedging: signing deals with everyone, including Washington. Canada is pivoting away from the United States entirely — reaching toward China, Saudi Arabia, and India while aligning with European efforts at what NATO leaders are calling de-Americanization. The split is not an accident. Trump has stated his preference for separate bilateral agreements, and the US is now treating the two partners asymmetrically: Mexico gets formal negotiating rounds in Mexico City, Canada is largely sidelined. ^[2][3] Mexico's strategy is the more pragmatic of the two. In May, it launched its largest trade mission to Canada in memory — 240 companies, 1,800 business meetings, more than 10 memoranda of understanding, and investment commitments including a CA$200 million Grupo Bimbo expansion and a $2 billion solar project. ^[4] Foreign Minister Marcelo Ebrard made the point plainly to his Canadian counterparts.

We want to work very closely with Canada, not just in this year, but the next 10, 20 or 50 years. — Marcelo Ebrard

Two weeks later, Mexico signed a modernized free trade agreement with the European Union, expanding a 2000 pact to cover services, digital trade, and agriculture, with exports to the EU projected to rise from $24 billion to $36 billion annually by 2030. ^[5] And at the same time, Mexico was sitting down with the US for formal bilateral negotiations — a third round scheduled in Mexico City — with Ebrard telling Washington there was no difference between the three countries too big to resolve. ^[2] Mexico is not choosing sides. It is keeping a seat at every table. Canada's approach is different in kind, not just degree. Prime Minister Mark Carney has declared that Canada's close ties to the United States have shifted from a strength to a vulnerability. ^[6]

Many of our former strengths, based on our close ties to America, have become our weaknesses, weaknesses that we must correct — Mark Carney

In late June, Canada signed a deal with China to import 49,000 Chinese electric vehicles annually at reduced tariffs, with Chinese officials projecting Canadian exports to China could increase 100 to 200 percent. ^[7] In early July, Carney became the first Canadian prime minister to visit Saudi Arabia in 26 years, signing $1 billion in deals spanning critical minerals, energy, artificial intelligence, and defense, and defending the trip by saying engagement is not endorsement. ^[8] Canada is also fast-tracking a trade deal with India targeting $50 billion in bilateral trade by 2030, up from roughly $17 billion. ^[9] And at the NATO summit in early July, Carney aligned Canada with European efforts to reduce dependence on the United States. ^[10]

The middle powers must act together, because if we're not at the table, we're on the menu. — Mark Carney

The rhetoric is sweeping. The delivery is still largely on paper. Conservative leader Pierre Poilievre has noted the gap between ambition and achievement.

Mark Carney’s talk of a rupture with the customer that buys two-thirds of our goods is not a plan. He has not negotiated a single new Free Trade Agreement with any country on earth. — Pierre Poilievre

The China EV deal, the Saudi agreements, the India target — these are commitments and projections, not delivered shifts in trade flows. Mexico's exports, for all its hedging, remain 83 percent directed at the United States. ^[5] And Carney has not been uniformly confrontational: he rejected using energy or critical minerals as leverage in the USMCA talks. ^[11]

I reject that characterization of it’s leverage. — Mark Carney

Still, the direction of travel is unmistakable, and Washington has noticed. Commerce Secretary Howard Lutnick called Canada's strategy the worst he had ever heard and singled out Carney's outreach to China. US Trade Representative Jamieson Greer said Canada lags behind Mexico in discussions. ^[12] The asymmetry is not merely observed — it is being manufactured. Trump has stated his preference for separate bilateral agreements over the trilateral framework. ^[3] On July 1, the US formally declined the USMCA extension, triggering annual reviews through 2036. ^[2] Mexico now has formal negotiating rounds in Mexico City. Canada does not. The US is not waiting to see which way its neighbors lean; it is giving one a seat and leaving the other standing.

We don’t need anything Canada has, we don’t need anything that Mexico has, but they need everything that we have, and they have to treat us better. — Donald Trump

The one moment the two countries acted in concert — the June 1 joint letter — was answered by a strategy designed to ensure they do not do it again. The North American axis that trade optimists imagined, a bloc of continental partners negotiating as equals, is not forming. What is forming is a split, and Washington is the one widening it.