Leaders of Canada and Mexico Vow Closer Economic Ties in the Face of Trump Trade Uncertainty 

Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney shake hands as they hold a press conference at the National Palace, in Mexico City, Mexico September 18, 2025. (Reuters)
Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney shake hands as they hold a press conference at the National Palace, in Mexico City, Mexico September 18, 2025. (Reuters)
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Leaders of Canada and Mexico Vow Closer Economic Ties in the Face of Trump Trade Uncertainty 

Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney shake hands as they hold a press conference at the National Palace, in Mexico City, Mexico September 18, 2025. (Reuters)
Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney shake hands as they hold a press conference at the National Palace, in Mexico City, Mexico September 18, 2025. (Reuters)

Canadian Prime Minister Mark Carney and President Claudia Sheinbaum promised Thursday to strengthen trade relations in the face of US tariff threats and pushed to keep the most important free trade agreement in the Western Hemisphere alive in the lead-up to negotiations next year.

Their meeting came during Carney's first visit to Mexico as Canada's leader and at a moment of economic tension for the region. The two leaders shook hands and strode side-by-side into the presidential palace in Mexico City earlier in the day. Despite not being present, US President Donald Trump and wider economic uncertainty were front and center in the visit.

“North America is the economic envy of the world, is the most competitive economic region of the world, and part of the reason for that is the cooperation between Canada and Mexico,” Carney said in a press conference following the meeting. “We complement the United States. We make them stronger. We are all stronger together.”

Key to Carney and Sheinbaum's meeting was the United States-Mexico-Canada trade pact, or USMCA, which is up for review in 2026.

Decades of free trade among the three nations has inextricably intertwined their economies: More than 75% of Canada’s exports and more than 80% of Mexico’s go to the US.

Trump’s ongoing and constantly evolving trade threats have put the countries’ political and business leaders on edge, as many scramble for more stable trade alternatives.

“Trump looms over this visit. Mexico and Canada now share a common threat from the US,” said Nelson Wiseman, professor emeritus at the University of Toronto.

On Thursday, Carney said he expects “much greater amounts of trade, much greater amounts of investment” between the Mexico and Canada. Sheinbaum said the two countries had agreed to a plan that what would “bring a new era of further strengthening economic ties” between the two nations.

Sheinbaum has said they want to increase bilateral trade in different sectors through the free-trade agreement and do so through maritime routes, which would avoid those goods having to pass through the United States.

Seeking improved relations

Carney was also looking to improve relations with Mexico during his two-day visit after some of Canada’s provincial premiers talked last year about cutting Mexico out of any new free trade deal with the US.

Trump lumped Canada in with Mexico on fentanyl smuggling and promised sweeping tariffs on both countries. Ontario Premier Doug Ford said then that Trump comparing Canada to the Mexico was “the most insulting thing I’ve ever heard from our friends and closet allies, the United States of America.”

Canadian Sen. Peter Boehm, who represented the Canadian government when Sheinbaum was sworn in as Mexico’s president last year, said the comments by the premiers, which he deemed out of their lane, upset the Mexicans.

“The Mexicans are particularly sensitive on these matters and there was concern about that, no doubt,” Boehm, who has been pushing closer relations between the two governments, said.

He said relations recently improved, noting Mexico appreciated Carney inviting Sheinbaum to the G7 summit in Alberta in June.

On Thursday, the two leaders promised new rounds of bilateral meetings in the coming months, and greater collaboration on security issues, agriculture, energy, finance, health, the environment and more.

“At this hinge moment. Canada is deepening our relationships with our long-standing partners,” Carney said. “Mexico is central to those missions.”

Mexico is Canada’s third-largest trading partner after the US and China. Canada was Mexico’s fifth-largest trading partner in 2024. But trade with the US remains paramount for both countries and preserving the free trade pact will be critical.

Trump looms over visit

Mexico and Canada have had different approaches to manage the negotiations with Trump’s administration but both countries want to increase bilateral commerce within the North American treaty.

Sheinbaum said the countries are already setting up teams and reviewing the agreement with the hopes of keeping trilateral free trade in place.

“Their priority is to strategize on how to deal with Trump and the coming renegotiation of the USMCA. Carney and Sheinbaum now recognize that tag-teaming Trump may be more effective than competing for separate deals with Trump, although they are still angling for them," said Wiseman, the professor.

That trade agreement has largely shielded the vast majority of Mexican and Canadian goods from the punishing duties. Canadian and Mexican companies can claim preferential treatment under the USMCA.

But Trump has some sector-specific tariffs, known as 232 tariffs, that are having an impact. There is a 50% tariff on steel and aluminum imports. Sheinbaum noted that the lack of tariffs on many goods was a sign of the economic ties between the countries, but noted she hoped to offset especially steel tariffs.

Despite that, Carney and Sheinbaum highlighted the importance of the US and the importance of unity between the three countries. They dodged questions about provocations by Trump and any tensions with the American leader, threading the word “optimism” throughout the press conference.

“USMCA is a testament to if Mexico, Canada and the United States work together, we can create prosperity, face global challenges successfully and position ourselves as the most dynamic region in the world,” Sheinbaum said.



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.