Mexico Gains Ground in Canada: Rising Exports and a New Agenda Ahead of the USMCA Review
Mexico widened its surplus with Canada in 2025 and is looking to turn the export rebound into a diversification strategy amid regional volatility.
Amid a more uncertain global trade environment and bouts of tariff pressure in North America, Mexico is gaining share in Canada’s market. Mexican exports to Canada totaled $22.169 billion USD in 2025, a 17% year-over-year increase, according to Bank of Mexico (Banxico) figures. By contrast, Mexican imports from Canada reached $12.555 billion USD, down 3.6%, widening Mexico’s trade surplus in the bilateral relationship.
The trend held at the start of 2026. In January, Mexico’s sales to Canada rose to $1.773 billion USD, 27% higher than in the same month a year earlier, while purchases from Canada fell by about 7%. The performance—still smaller than the trade both countries conduct with the United States (U.S.)—confirms a meaningful shift: Mexico is tapping pockets of demand and regional supply chains that have strengthened after global logistics shocks and companies’ push to source from closer suppliers.
Much of the momentum is coming from manufacturing. Transportation equipment—which includes cars, trucks, and auto parts—accounts for nearly half of Mexico’s exports to Canada. The auto sector’s weight reflects the region’s production integration under the USMCA, regional content requirements, and the need to meet demand that blends end sales with inventory replenishment. For Mexico, the takeaway is clear: any regulatory changes or rules-of-origin adjustments in the agreement’s review could directly affect its bilateral balance and the industrial activity of export-oriented states.
On the Canadian side, growth in imports from Mexico coincides with a diagnosis of an “underdeveloped” relationship. Canadian business organizations have emphasized that Mexico represents around 1.1% of Canada’s total exports—low for a partner within the same trade bloc. That imbalance helps explain Ottawa’s renewed interest in deepening ties with Mexico, both to diversify markets and to reposition investment projects in strategic sectors.
In that context, Canada kicked off 2026 with a trade mission focused on Mexico as part of its Team Canada Trade Mission initiative, bringing together companies and industry groups in sectors such as energy, mining, agribusiness, transportation, technology, financial services, and consulting. Minister Dominic LeBlanc took part, delivering a message centered on strengthening North American integration ahead of the USMCA review.
Mexico’s response has also been formalized. The Ministry of Economy, led by Marcelo Ebrard, opened a call for Mexican companies to join a trade mission to Canada from May 7 to 9, with registration running from March 12 to April 11. The trip aims to promote Mexican products, explore investment opportunities, and—at the same time—open bilateral talks about the treaty’s future. The federal government, under President Claudia Sheinbaum’s administration, has stressed expanding Mexico’s commercial presence in markets that can complement its heavy reliance on U.S. demand.
Beyond Autos: Investment, Logistics, and Infrastructure as the “Second Layer” of Trade
Export growth to Canada is not limited to a strong year in manufacturing; it is also supported by a “second layer” of integration: investment and logistics. Over the past decade, Canadian investment in Mexico has increased notably, and projects have emerged that connect to trade-critical infrastructure: rail networks with more direct customs flows, greater air-cargo capacity between key cities, and port operations aimed at reconfiguring routes. These moves matter because trade diversification depends not only on selling more, but also on reducing transportation costs, improving delivery times, and increasing regulatory certainty—variables that weigh especially heavily in sectors such as auto parts, agri-food, and industrial equipment.
In recent months, business deals have been announced pointing in that direction, including acquisitions and partnerships in mining, technology, and logistics. For Mexico, the implication is twofold: on one hand, the range of productive and services investment broadens; on the other, it becomes more urgent to harmonize rules, streamline procedures, and strengthen infrastructure at customs facilities, ports, and rail corridors so that higher trade volumes do not translate into bottlenecks.
The regulatory debate is also in the background. Under the USMCA, certain investment protections and dispute-settlement mechanisms were adjusted relative to NAFTA, increasing the importance of domestic certainty in each country. In Mexico, that factor ties into the competitiveness agenda: energy availability, security along logistics routes, infrastructure quality, and clear rules for new projects. In Canada, the push to rebalance the trade relationship combines with the need to secure strategic supplies and expand markets for its exporters.
Looking ahead, the USMCA review in 2026 serves as a calendar anchor. For Mexico, locking in gains in Canada could act as a diversification valve within North America, but its reach will depend on whether export momentum holds beyond the automotive cycle and translates into new production linkages. For Canada, the challenge will be turning trade missions and corporate agreements into greater real penetration in the Mexican market.
Overall, the rebound in Mexican exports to Canada and the decline in imports from that country widen the surplus, but also underscore a relationship with room to grow in both directions. Bilateral trade is gaining relevance as a tool for regional resilience, though its consolidation will depend on infrastructure, certainty, and how the USMCA negotiations evolve.
