Introduction
Canadian Prime Minister Mark Carney has reignited discussions about “bilateralizing” the United States-Mexico-Canada Agreement (USMCA) following recent overtures to China, particularly the tariff agreement he announced with China and his comments on the U.S. administration under President Donald Trump.
Carney’s Speech and China Relations
On January 20, 2026, during the annual World Economic Forum (WEF) meeting in Davos, Switzerland, Carney delivered a speech on the current global scenario and how middle powers, including Canada, adapt to the present circumstances.
Carney asserted that the world faces a rupture rather than a transition, primarily due to various crises across different sectors—financial, healthcare, energy, and geopolitical—that have highlighted the risks of deep global integration.
Ansley, a consultancy firm, noted that Carney’s speech came after his visit to China and the conclusion of a strategic partnership between Ottawa and Beijing amidst international tensions driven by U.S. policies and the fragmentation of a rules-based international order.
U.S. Concerns and T-MEC
On Sunday, U.S. Treasury Secretary Scott Bessent suggested addressing U.S. concerns about Canada’s links with China through the USMCA renewal process instead of immediate tariff hikes.
“We cannot allow Canada to become a conduit for China flooding the U.S. market with cheap goods,” Bessent stated.
Carney refuted suggestions that Ottawa is leaning towards Beijing or violating the USMCA, while detailing the new agreement that significantly reduces tariffs on 49,000 Chinese electric vehicles from 100% to 6%.
“We have committed under the USMCA not to seek free trade agreements with economies not subject to market laws without prior notification. We have no intention of doing so with China or any other economy not subject to market laws,” Carney clarified.
AmCham Dismisses Fragmentation
The American Chamber of Commerce (AmCham) Mexico deemed the possibility of fragmenting the USMCA into bilateral agreements unfeasible, as it would necessitate congressional approval, which is currently absent given President Donald Trump’s and his party’s lack of political support.
“Any attempt to transition towards bilateral agreements or conduct a deep renegotiation would inevitably require the approval of the legislative powers of all three countries,” Pedro Casas, AmCham Mexico’s executive vice president, emphasized during a webinar on the U.S.-Mexico bilateral relationship.
AmCham executives highlighted internal uncertainty, where Mexico faces domestic challenges that could turn into investment opportunities in areas like water, energy, and technology.
“We don’t foresee a likely scenario of bilateral agreements, nor do we consider it optimal for Canada, Mexico, or the U.S. to exit the agreement,” Casas stated.
“We do perceive a significant level of concern among businesses regarding the rule of law in Mexico, not just judicial reform but also other bureaucratic issues,” García warned.
Key Questions and Answers
- Q: What is the main concern raised by Ansley regarding the USMCA? A: Ansley warns that recent tensions might trigger bilateral agreements due to Canada’s overtures to China.
- Q: How does Carney respond to U.S. concerns about Canada-China links? A: Carney clarifies that Canada has committed to not seeking free trade agreements with economies not subject to market laws without prior notification, specifically denying any intention to do so with China.
- Q: What does AmCham Mexico think about fragmenting the USMCA into bilateral agreements? A: AmCham Mexico deems it unfeasible, as any fragmentation would require congressional approval, which is currently absent.
- Q: What are the internal challenges Mexico faces, according to AmCham executives? A: AmCham executives mention domestic challenges in areas like water, energy, and technology that could become investment opportunities.
- Q: What concerns do businesses have regarding Mexico’s rule of law? A: Businesses express concern over the rule of law in Mexico, including judicial reform and other bureaucratic issues.
