Canada, EU deepen trade alliance as Trump unleashes tariff salvo

11 Jul 2025 23:11
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Canada is strengthening its alliance with the European Union in response to escalating US trade aggression.

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Canadian Foreign Minister Melanie Joly awaits the arrival of US Secretary of State Marco Rubio for a bilateral meeting on the sidelines of the G7 foreign ministers meeting in La Malbaie, Canada, Friday March 14, 2025 (Saul Loeb, Pool Photo via AP)

Amid escalating economic threats from Washington, Canada is reinforcing its strategic alignment with the European Union to counterbalance what officials describe as a weakening US trade posture.

Speaking at a joint press conference in Ottawa on Friday, Canadian Minister of Industry Mélanie Joly confirmed that Ottawa is working closely with Brussels to defend open markets and bolster economic sovereignty.

"As other countries make sovereign decisions in terms of international trade, we [Canada-EU] further align ourselves. And we reaffirm the strength of free trade between us and our businesses," Joly said in French.

"As the world faces economic challenges, the need for cooperation between Canada and the EU has never been so urgent." She added that the meeting with EU Commission Executive Vice-President Stéphane Séjourné was conducted in "solution mode," to ensure that "while the US becomes weaker, Canada and the EU will become stronger."

Tariff Standoff

Joly's remarks came just days after US President Donald Trump announced a sweeping 35% tariff on Canadian imports, set to take effect August 1. Trump also made clear that existing tariffs on key sectors, including 25% on non-USMCA-compliant goods and 50% on steel and aluminum, will remain in place. He later disclosed that Ottawa had reached out to him directly in response.

Canada has already begun responding. Since March, it has imposed C$30 billion in retaliatory tariffs on a range of US goods, including computers, steel, and consumer products. Officials are also considering financial support for domestic industries, particularly aluminum producers, if Washington continues its tariff escalation.

Meanwhile, EU officials are drafting countermeasures of their own, reportedly preparing up to €116 billion in retaliatory tariffs, pending formal notification. The US, Canada, and the EU have signaled that they are prepared to act jointly if necessary.

As US trade aggression rattles global markets, Canadian businesses have begun accelerating efforts to diversify export destinations. The country has reduced its dependency on the US from 78% to 68% of its exports, expanding trade with the EU, UK, Japan, and Australia.