What Mark Carney’s Leadership Signals for Canada–US–Mexico Trade

Mark Carney’s appointment as Prime Minister of Canada in 2025 was not just a change in leadership—it marked the beginning of a new era in North American economic policy. With a background that includes serving as Governor of both the Bank of England and the Bank of Canada, Carney assumed office at a critical moment: trade relations with the United States are at their most strained in decades, and Mexico is working to solidify its role as a strategic partner in the region. 

In his inaugural address, Carney made it clear that his administration would signal a turning point:

This statement—interpreted as a direct rejection of former President Trump’s policies—set the tone for what is expected to be a more complex trade relationship in the coming years. 

Carney’s Strategy for North American Trade 

Mark Carney is not a traditional politician. His training as an economist and experience leading central banks have given him a unique perspective on Canada’s trade challenges. One of his top priorities has been diversifying Canada’s trade partnerships—a strategic effort to reduce overreliance on the U.S. and open access to other global markets. This approach sets the stage for his broader trade agenda and repositions Canada within a more balanced North American economy. 

How is Carney pursuing this goal?

• His administration is fast-tracking trade agreements with the European Union and the United Kingdom to expand access to other democratic markets. 

• Carney emphasized aligning with partners that support fair trade, stable supply chains, and tariff-free cooperation during visits to Paris and London. 

Despite these efforts, analysts caution that diversification will take time. The U.S. remains Canada’s largest trading partner due to deeply integrated supply chains and geographic proximity. 

USMCA Under Pressure: What Carney’s Policies Mean for North American Trade 

Carney views the USMCA as the "minimum floor" for trade relations with the U.S. and has demonstrated a firm stance by imposing retaliatory tariffs in response to U.S. protectionist measures. While he supports the existing agreement, he advocates for updates in key areas where Canada seeks more flexibility, such as digital trade and intellectual property. 

Additionally, Carney’s government sees trade barriers as direct threats to Canada’s supply security. As the leading supplier of energy and critical minerals like lithium and cobalt to the U.S., Canada holds significant leverage in negotiations. 

His strategy adds complexity to the USMCA’s trilateral relationships, especially as Mexico and the U.S. pursue their own agendas. Carney’s broader goal is to modernize the agreement to reflect today’s economic realities. His modernization focus includes: 

These efforts are aimed at reinforcing Canada’s leadership and promoting a more balanced, forward-looking trade framework across North America. 

Canada’s Green Trade Shift: Policy Changes and Global Impact 

Carney’s government has introduced a sweeping environmental policy shift, scrapping the carbon tax for individuals and small businesses while placing more responsibility on large polluters. It also includes incentives for electric vehicles and energy-efficient housing upgrades. 

What specific steps is Carney taking to support this transition?

• A Carbon Border Adjustment Mechanism (CBAM), modeled after the EU’s system, has been proposed. It would impose tariffs on imports from countries with weaker environmental rules—potentially impacting the U.S. and Mexico. 

This move is not just about cutting emissions. It positions Canada as a global clean tech leader and reshapes trade relationships through a climate-driven lens. 

Mexico in the Equation: Ally or Competitor? 

Under Carney’s leadership, the relationship between Canada and Mexico presents both opportunities and challenges. While both nations aim to defend the USMCA against Trump-era pressures, they are also competing for investment in high-value sectors like advanced manufacturing and electric vehicles. 

Where Are Canada and Mexico Finding Common Ground?

• Joint stance on tariffs: Carney and Mexican President Claudia Sheinbaum have already coordinated joint responses to Trump’s protectionist measures. In 2025, their cooperation helped secure the temporary removal of U.S. tariffs, proving the effectiveness of bilateral collaboration. 
• Supply chain integration: Both countries seek to reduce reliance on Asia in key areas like semiconductors and EV batteries. Canada contributes technology and critical minerals; Mexico offers skilled labor and geographic proximity to the U.S. market. 

PRODENSA Key Points:

• A new foreign policy paradigm: Carney breaks from Canada’s traditional deference to Washington, asserting national sovereignty and a more independent trade stance. 

• Trade diversification as a strategic priority: Canada seeks to reduce dependence on the U.S. through accelerated agreements with the EU and UK, though logistical and structural challenges remain. 

• Modernization of the USMCA: Carney sees the USMCA as a baseline, advocating updates in digital trade, energy, labor, and environmental standards. 

• Geo-economic use of natural resources: Canada leverages its role as a key supplier of energy and critical minerals to the U.S. as a strategic bargaining chip. 

• Green agenda with global impact: Carney's environmental model includes incentives and climate tariffs (CBAM) that may reshape trade with Mexico and the U.S.

• Mexico as both strategic partner and competitor: Canada and Mexico cooperate to defend the USMCA but compete for critical investment in manufacturing and green industry—requiring smart, balanced diplomacy.