Canada’s turn to Europe: Can the EU replace the US? Analysis by Matanat Nasibova

Relations between Canada and the European Union have historically been built on a solid foundation of shared values and their alliance within NATO. Ottawa established its first official ties with the EU's predecessors as early as the mid-20th century, and in 1976, Canada signed a Framework Agreement on Commercial and Economic Cooperation, becoming the first industrialised Western country to conclude such a deal.

However, economics has always set its own rules. Canada has traditionally sent between 75% and 95% of its exports to the United States, leaving the European market important but secondary for many years. Nevertheless, Canadian diplomacy has developed a clear reflex: whenever trade tensions with Washington arise, Ottawa immediately steps up dialogue with Brussels in an effort to diversify its economic ties.

Canada is pursuing the same policy today. But amid another escalation in tensions with the United States, closer Canada-EU ties are taking on a strategic character that goes beyond trade and economics.

A trade rift between neighbours

Following the failure of bilateral negotiations and Washington's imposition of 50% tariffs on a range of Canadian goods, Ottawa responded with tough countermeasures. Starting September 8, Canada will impose tariffs ranging from 15% to 50% on more than 700 US products, with a combined value of approximately $20 billion.

At the same time, Canadian Prime Minister Mark Carney officially declared the end of the era of “ever-closer economic relationship with the United States,” describing excessive dependence on its neighbour as the country’s main vulnerability. Ottawa has set itself an ambitious goal: to double exports to other regions over the next decade. The European Union, with the world’s second-largest economy, has naturally emerged as a key pillar of this long-term strategy.

The White House responded immediately. US President Donald Trump wrote on Truth Social that tariffs on Canadian cars and trucks would be raised to 50% starting January 1, 2027, concluding: “We don’t need Canada, they need us! They do 95% of their business with the U.S., with us, the exact opposite!” The two sides ultimately traded barbed statements, exposing big economic and political differences.

What Ottawa is preparing for Brussels

The partners do not need to build their relationship from scratch: they already have the Comprehensive Economic and Trade Agreement (CETA), under which bilateral trade in goods reached €130.8 billion in 2025. Ottawa is now seeking to deepen the agreement by launching deals on digital trade and tariff-free supplies of critical resources.

At the invitation of European Commission President Ursula von der Leyen, Mark Carney is travelling to Strasbourg to deliver a speech on the state of the Union, an appearance that has already drawn close attention from the White House. In addition, the EU-Canada summit will take place on October 29–30, with the two sides preparing a package of concrete proposals:

Critical raw materials: Ottawa is ready to offer the EU access to its substantial reserves of lithium, graphite, and nickel. For Brussels, which is urgently seeking to reduce its dependence on China for rare-earth metals, the offer is highly attractive.

Energy corridor: The focus is not only on oil and gas supplies but also on resources for nuclear energy, as the European Union seeks reliable alternatives to sources that are becoming unavailable.

Arctic security: In addition to participating in EU defence initiatives, including the €150 billion SAFE programme, Arctic security is emerging as a key area of cooperation. Ottawa has already announced plans to allocate approximately $25.7 billion to upgrade military infrastructure in the Northwest Territories, Yukon, Nunavut, and at Goose Bay Air Base.

Can Europe replace the US market?

Despite the government’s active efforts, it will be difficult for Carney’s administration to replace the US market quickly. The reason lies in geographic proximity and decades-long production chains, particularly in the automotive, energy, metallurgy, and agricultural sectors. Even a rapid expansion of trade with Europe will not fully compensate for the US market.

Therefore, Canada’s current rapprochement with the EU is not an outright shift away from the United States toward Europe, but rather a pragmatic response to pressure from Washington. The United States remains Ottawa’s main partner, but it is no longer viewed as the country’s only indispensable one.

In trying to force Canada to yield, Washington is instead pushing it toward a more independent policy. Within Canada — including French-speaking Quebec — US actions have triggered a powerful wave of nationalist resistance, with Canadians rejecting concessions on cultural and language laws. The trade war is gradually taking on the character of a struggle to defend national sovereignty.

The future model: A strategic triangle

There is no discussion of Canada becoming a full member of the EU, either in the near or medium term. The main obstacles are geography and the very logic of Brussels. Article 49 of the Treaty on European Union clearly limits membership to European states, while Ottawa itself is not prepared to transfer part of its powers to supranational institutions.

The most realistic scenario is the formation of a strategic triangle between Canada, the United States, and the EU. Under this model, Ottawa would cease to be Washington’s “quiet junior partner” and gain alternative pillars of support. The sustainability of this model will depend on whether Canada can offset the enormous economic weight of the United States through deeper technological and raw-materials integration with Europe.