Joanna was married to Duke Phillip of Burgundy, and England needed to maintain a good relationship with Burgundy in order to keep trade flowing and have an ally in the event of war with france.
england's relationshio with Burgundy was good and there was discussion of a burgundian wife for the king's son Henry, but this was derailed after Phillip's death in October1506.
Duke Phillip's death weakened Burgundy significantly. his Grieving wife Joanna was deemed unfit to rule, so Ferdinand declared himself King of Castile. in succession to Isabela, was the 6 year oldArchduke Charles I (son of Joanna and Phillip).
Margaretsavoy became regent to her nephew Charles, so henry became worried that France may try to seize part of the Netherlands and disrupt the British trade