A Common Pattern behind Diverging Fortunes: U.S. Tariffs and Exports from Canada and Mexico

Canadian goods exports to the United States fell approximately 10 percent in the 12 months ending April 2026, while Mexican exports rose about 16 percent, despite Mexico facing higher average tariff exposure.
Within both countries, sectors with greater tariff exposure experienced weaker exports to the United States after March 2025, when a 25 percent blanket tariff was imposed.
A 10 percentage point increase in tariff exposure was associated with roughly 5 percent weaker exports in Canada and 12 percent weaker exports in Mexico, though the difference between these estimates is not statistically significant.
Canada's export decline was concentrated in metals sectors (steel, aluminum, copper), whereas Mexico's weakness was broader, affecting vehicles and other sectors beyond metals.
Mexican exposed sectors showed specific weakness in the U.S. market relative to other destinations, with a 10 percentage point exposure difference linked to an 11 percent decline in U.S. exports compared to elsewhere.
Mexico's aggregate export growth was driven by a surge in machinery exports, particularly computers for U.S. AI data centers, which masked declines in most other sectors.
The sectoral export weakness emerged specifically after March 2025, with no detectable pre-trend in the months preceding the tariff shock.
Canada's headline export decline was broad across sectors, while Mexico's aggregate strength coexisted with significant pressure on tariff-exposed industries.