Canada’s finance minister Francois-Philippe Champagne and foreign affairs minister Anita Anand are heading to Mexico City for two days of talks beginning on Tuesday, the report said, citing sources familiar with the planning.

The potential discussions come days after both Canada and Mexico failed to reach trade agreements with the US by an Aug 1 deadline set by president Donald Trump.

On Thursday, Trump signed an executive order increasing tariffs on Canadian goods to 35% from 25% on all products not covered by the US-Mexico-Canada trade agreement (USMCA).

The White House cited what it said was Canada’s failure to stop fentanyl smuggling and a failure to address US concerns about trade barriers.

By contrast, Mexico secured a temporary reprieve. Sheinbaum secured a pause on new tariffs coming into effect and a 90-day period to work on a trade deal in a call with Trump. The agreement avoids the 30% tariffs that had been set to come into force on Friday deadline.

The pause safeguards the USMCA and means goods compliant with the pact will continue to be exempt from the 25% tariffs Trump imposed earlier this year due to the fentanyl crisis.

Reuters could not immediately verify the report. The government of Mexico, Canada’s prime ministers office and Global Affairs Canada did not immediately respond to requests for comment.