Canada, EU Strengthen Trade Alliance Amid US Tariff Disputes

Amid rising trade tensions with the United States, the European Union and Canada have reaffirmed their strong trade partnership. While the joint statement does not explicitly reference President Trump, it implicitly addresses his expansionist rhetoric, emphasizing the critical need to uphold and defend international law while maintaining diplomatic dialogue.

Canadian Prime Minister Justin Trudeau’s recent visit to Brussels underscored the strengthening relationship between Canada and the European Union, highlighting that the power of their alliance, rather than individual actions, drives its success. "The friendship and alliance between Canada and the European Union have deepened significantly over the years, particularly in a world that has become increasingly unpredictable on multiple fronts."

Antonio Costa, President, European Council, emphasized the long-standing commitment of both the EU and Canada to demonstrate that trade agreements deliver far more substantial benefits than the imposition of tariffs. Costa pointed out that the provisional implementation of the Canada-EU trade agreement (CETA) in 2017 has already resulted in a notable 60% surge in trade between the two regions.

In their joint statement, Canada and the EU reiterated their steadfast commitment to a global system grounded in multilateral principles, including sovereignty, territorial integrity, and the inviolability of borders. “These fundamental values are essential for preserving stability, fostering cooperation, and ensuring the integrity of the international community.”

Beyond the potential imposition of universal tariffs on steel and aluminum, Trump's actions have raised wider concerns. His attempts to purchase Greenland from Denmark, proposals for the annexation of Canada, and suggestions to address the Russia-Ukraine conflict without European involvement, along with threats of economic and military coercion should his demands be rejected, have further complicated global relations. “We are reliable and predictable allies—strong partners in peace and security. We have supported Ukraine from the outset, we are close trade allies, champions of climate action, and committed partners in digital innovation. We need more dialogue,” said Costa.

US Tariffs on Canada, the European Union

On Feb. 1, President Trump signed an executive order imposing 25% tariffs on most goods of Canada, disrupting long-standing trade agreements between the two countries. In response, Trudeau's government vowed to impose reciprocal tariffs. While Canada and the US agreed to a 30-day delay in implementing the tariffs, the broader risk of an escalating trade conflict remains. One of Trump’s first executive actions after taking office was a directive to review US trade relationships, with the results of that investigation expected by April 1. "If those tariffs are implemented, or if the investigation into commerce tariffs scheduled for April proceeds, we must be prepared to respond decisively," Trudeau stated. 

Last week, President Trump signed an executive order imposing 25% tariffs on steel and aluminum imports. In response, Ursula von der Leyen, President of the European Commission, stated that the EU would implement "firm and proportionate" countermeasures, although the specific actions are still being determined. This development mirrors a similar trade dispute in 2018, when Trump imposed tariffs on EU steel and aluminum worth US$6.9 billion. In retaliation, the EU introduced tariffs amounting to US$3 billion on select products such as Levi’s jeans, bourbon whiskey, and Harley Davidson motorcycles.