Canada turning to Europe as trade tensions with US escalate

Canada is accelerating efforts to deepen economic and strategic ties with Europe as its relationship with the US faces its worst trade tensions in decades, according to a Sunday report by the Wall Street Journal.

Prime Minister Mark Carney has held talks with European leaders, including those in France, Germany, and Italy, exploring ways to bring Canada closer to the EU without pursuing full EU membership, it said.

Canadian officials are examining the possibility of an “associate membership” arrangement that could provide closer access to the EU’s $21 trillion single market, particularly in strategic sectors such as energy, AI, critical minerals, and defense.

Two developments – US President Donald Trump’s efforts to gain control of Greenland and his war with Iran – have strengthened the case for some European leaders for closer ties with Canada. Carney has expanded his outreach to leaders who are traditionally closer to Trump, including Italian Premier Giorgia Meloni, while maintaining frequent contacts with French President Emmanuel Macron and Finnish President Alexander Stubb.

By the summer, Canadian and European officials had stepped up discussions through multiple diplomatic channels. During preliminary G7 meetings in France, they identified 11 areas for deeper cooperation aimed at reducing dependence on US technology, defense equipment, and trade.

• Surprised by speed and scales of proposals

Carney’s meeting with Macron in Paris ahead of the G7 summit in Evian this June reportedly surprised French officials with the speed and scale of Canada’s proposals. At the same time, Carney was in frequent contact with German Chancellor Friedrich Merz as the two countries finalized negotiations on Canada’s planned $25 billion purchase of German submarines.

The discussions could also include easier movement of workers, expanded research and university exchanges, as well as cooperation on data centers, undersea cables, cloud infrastructure, and satellite networks.

Carney is also seeking to strengthen Canada’s energy links with Europe, including infrastructure that could allow Canadian natural gas to reach European markets and reduce reliance on Russian energy.

The initiative reflects Ottawa’s attempt to reduce its heavy economic dependence on the US. Canada sends two-thirds of its exports across the border, making diversification a major challenge.

Carney, who previously served as governor of the Bank of England, is betting that closer European ties can help Ottawa withstand pressure from Washington while reshaping its long-standing economic orientation toward the US.

European governments, however, have approached the proposal cautiously, with some concerned that a dramatic shift in Canada-EU relations could further strain ties with Washington.