The Canadian Minister of Trade between Canada and the US, Dominic LeBlanc, is in Mexico this week along with over 350 business delegates to discuss trade and improve economic ties. LeBlanc said that the Mexican economic secretary said the Mexican government is interested in a trilateral trade agreement between Canada, Mexico and the US. The Canada-United States-Mexico Agreement (CUSMA) is up for review this year with negotiations set to take place in the summer. In the meantime, it was reported that Canada ran a trade deficit in December, which contributed to Canada’s largest trade deficit on record in 2025, excluding 2020, which was impacted by the COVID-19 pandemic.

• Canadian exports rose by 2.6% to $65.6 billion in December. Shipments to the US increased by 1.1% in December. Exports to other countries jumped by 5.8% to a new record high, suggesting Canada’s diversification efforts are helping.
• Exports benefited from higher shipments of metal and mineral products, particularly gold, silver and platinum. Aircraft exports also rose over the month. However, the gains were partially offset by a small drop in energy exports.
• Imports inched higher by 0.6% to $66.9 billion in December, driven by an increase in purchases of motor vehicles and parts. Conversely, imports of consumer goods declined.
• Canada’s trade deficit narrowed to $1.31 billion in December. Canada has run a trade deficit in three consecutive months. Excluding the COVID-19 pandemic in 2020, Canada ran its largest trade deficit on record in 2025.

Canada continues to try to diversify trade amid trade tensions with the US. All signs point to improving trade ties with Mexico. While US President Donald Trump has suggested a willingness to withdraw from CUSMA, Canada and Mexico appear to be on board to strengthen the agreement. There is still plenty of uncertainty until CUSMA is reviewed. Canada remains without a sectoral trade deal with the US, which has weighed on overall economic conditions.

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