Carlos Taylhardat | 3 Narratives News | September 18, 2025

As Washington threatens tariffs, Ottawa and Mexico City huddle on a “Plan B.” But can a bilateral pivot matter when both still depend on U.S. markets?

A High-Stakes Mission Begins

On the morning of September 18, Canadian Prime Minister Mark Carney set out for Mexico City. His two-day mission with President Claudia Sheinbaum is billed as an opportunity to “warm up” relations, sketch a more resilient North American playbook, and prepare for the mandatory 2026 review of the USMCA.

The trip unfolds against a turbulent backdrop. Last year, Ottawa imposed a 100% surtax on Chinese-made electric vehicles, effective October 1, 2024. The measure was intended to protect Canadian manufacturing jobs, but Beijing responded with tariffs on Canadian farm exports, including canola and pork. That left Canada squeezed from two sides: punished by China, and watching U.S. manufacturers migrate southward, hollowing out plants north of the border.

With U.S. tariffs looming and China hitting Canadian farmers with retaliatory duties, Canada and Mexico are racing to strengthen their trade ties. On September 18, 2025, Canadian Prime Minister Justin Trudeau (or a future leader like Mark Carney, as some speculate) arrived in Mexico City to meet President Claudia Sheinbaum. Their two-day summit, dubbed the “Rebellion Summit” to sketch a resilient North American trade plan ahead of the critical 2026 USMCA review. For Canadian farmers like Alberta’s Sarah Thompson, whose canola exports face China’s wrath, and Mexican auto workers eyeing new supply chains, the stakes are personal.

Context — Pressure on All Fronts

The clock is ticking. The USMCA, North America’s trade pact, faces a mandatory review in 2026, with the U.S. and Mexico already starting consultations. Canada can’t afford to go it alone.

Last year, Ottawa slapped a 100% import tax on Chinese electric vehicles (EVs), effective October 1, 2024, to protect its auto industry. China retaliated in March 2025, targeting Canadian canola, pork, and peas, hitting farmers hard. Meanwhile, U.S. manufacturers are shifting south to Mexico, threatening Canadian jobs. The summit aims to counter these pressures by deepening Canada–Mexico ties, but the U.S. market’s dominance looms large.

Narrative One — Strategic Diversification: Building a North American Plan B

Supporters see the summit as smart risk management.

With U.S. policies unpredictable—think tariff threats over migration or fentanyl—Canada and Mexico want a Plan B. By boosting trade in autos, batteries, and agriculture, they aim to keep more economic value in North America, even if U.S. politics shift.
The EV tax, for instance, counters China’s subsidized imports. Partnering with Mexico could secure supply chains for EV batteries and critical minerals. Joint labour and environmental standards could also strengthen their hand in 2026 talks. “This isn’t about ditching the U.S.,” a Canadian official said.

“It’s about arriving at the table with leverage.”

Narrative Two — The Skeptics: You Can’t Replace the U.S. Market

Critics see over-promising.

Canada sends about 75% of its exports to the U.S., and Mexico even more. No Canada–Mexico trade boost can replace that market. The EV tax, meant to protect jobs, has backfired: it raised car prices, slowing Canada’s climate goals, and China’s tariffs have cost farmers millions. Ottawa is now reviewing the policy under pressure.

Mexico and Canada also face hurdles. Their labour laws and regulations differ, complicating cooperation without U.S. involvement.

“You can’t just pivot away from the U.S.,”

said trade analyst Maria Lopez. “It’s the center of gravity.”

Nor are Canada and Mexico perfectly aligned. Mexico’s labour and regulatory landscape diverges from Canada’s. Without the U.S. at the center, setting shared standards—and resolving disputes—becomes more complicated.

Narrative Three — The Silent Story: Sovereignty and the 2026 Rules of the Game

Beneath the politics lies a deeper question: who sets the rules for the next decade of North American trade?

Carney and Sheinbaum are not just exchanging pleasantries. They are rehearsing for the 2026 review, trying to arrive at a shared agenda: guardrails on emergency tariffs, stronger labour and environmental enforcement, and EV supply-chain rules that cannot be upended overnight by Washington.

This is also about sovereignty. For smaller open economies like Canada and Mexico, the EV tariff fight illustrates a bind: protect industry, and risk retaliation; open the door to subsidized imports, and risk de-industrialization. The only sustainable answer may be regional rules that smooth those trade-offs—rules both leaders hope to shape before the U.S. dictates terms.

What You Need to Know

• Canada and Mexico are strengthening trade and security ties to prepare for the 2026 USMCA review.
• Canada’s 100% tax on Chinese EVs, effective October 2024, triggered China’s tariffs on Canadian crops in March 2025, prompting a policy review.
• Supporters see the summit as a hedge against U.S. volatility; skeptics say the U.S. market is irreplaceable.
• The real goal: craft rules to protect Canada and Mexico’s economic sovereignty in 2026.

What’s Next?

As consultations for the USMCA review ramp up, the summit’s success hinges on one question: Can Canada and Mexico shape North America’s trade future, or will the U.S. call the shots again?

Key Takeaways

• Prime Minister Carney begins a two-day visit to Mexico City to meet President Sheinbaum, aiming to tighten ties ahead of the 2026 USMCA review.
• Canada’s 100% surtax on Chinese EVs (effective Oct 1, 2024) triggered Chinese retaliation in March 2025; Ottawa is now reviewing the measure.
• Supporters call the summit a smart hedge against U.S. volatility, a chance to build supply chains and co-write 2026 rules.
• Skeptics say U.S. dependence dominates, tariffs raise costs, and Mexico–Canada trade cannot substitute for the American market.
• The silent story: sovereignty—smaller economies searching for leverage to shape the rules of North America before Washington decides for them.

Questions This Article Answers

What is the “Rebellion Summit”?
An informal label for this week’s Carney–Sheinbaum meetings in Mexico City, aimed at deepening trade and security cooperation ahead of the 2026 USMCA review.

Why did Canada impose 100% tariffs on Chinese EVs?
To protect domestic auto manufacturing from subsidized Chinese imports. The policy is now under review after Chinese retaliation hit Canadian farmers.

What did China do in response?
Beijing announced tariffs on about $2.6B of Canadian agricultural and food exports, effective March 20, 2025.

Can Canada and Mexico reduce dependence on the U.S.?
Not fully. The U.S. remains the dominant market, but a stronger Canada–Mexico lane can increase bargaining power in 2026.

What’s the next milestone?
Public consultations and policy positioning for the 2026 USMCA review, already launched by USTR and Mexico’s trade ministry.