The European Union has invited Canada to explore becoming its first “associate member,” as recognition of a growing closeness, driven by both experiencing deteriorating relationships with the United States.
On September 16, European Commission president, Ursula von der Leyen, told the European Parliament while Canadian Prime Minster Mark Carney looked on that, “We want to bring the relationship with Canada to the highest level possible. We must urgently reimagine our partnerships.” Carney later tweeted: “Canada and the EU are natural partners, united by shared values.” Looming unspoken over the proceedings was the question: If they joined forces, could they together loosen America's throttling grip on international trade?
The arrangement would not be unprecedented; other European countries, such as Norway and Switzerland, are not formal EU members, but partner with the bloc on trade and open borders. Also, the allies have already seen a blossoming of their trade relationship since large parts of the EU-Canada Comprehensive Economic and Trade Agreement came into force in 2017. However, the deal still needs to be ratified by all EU member states, and ten have yet to sign, including France, Italy and Poland.
So what would a closer trade relationship between the EU and Canada actually look like? And can either afford to ditch, or significantly walk back, their current trading relationships with America?
At present, in dollar terms, the EU imports less from Canada than from Kazakhstan ($34.48 billion and $34.55 billion respectively). That’s 1.2%; a drop in the trade volume bucket, which was $2.835 trillion in total EU imports in 2025, according to TradingEconomics.com.
At present, painful as it might be, the EU buys the vast majority of its goods from China, to the tune of $630.01 billion, or 23% by value, with the U.S. ($390.91 billion) and the U.K. ($178.03 billion) a distant second and third.
EU industrial leaders are frustrated by China flooding the European market with cheaper cars, especially EVs. And, indeed, on the face of it, Canada has plenty of cars for sale – it exported $52.44 billion worth of cars in 2025, almost all of them to the U.S. But it’s unlikely that the price point on a Canadian car would make it competitive with a Chinese-made one, or even one manufactured in Germany. And that export figure masks the fact that much of Canada’s automotive exports (and, for that matter, imports) are inextricably entangled in the parts-and-finished-car manufacturing ecosystem it shares with the U.S. and Mexico, under the Automotive Products Trade Agreement of 1965, which was expanded to include Mexico under Nafta.
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What does Canada have that the EU could really want? Possibly its oil, most of which currently goes to the U.S. — at $137.72 billion worth of mineral fuels, oils and distillation products, that’s Canada’s biggest export. The EU imported $467.75 billion worth of oil in 2025, mostly from the United States, Kazakhstan, and Norway, so Canada could certainly put a dent in that while allowing the EU to potentially thumb its nose at an increasingly hostile America. After all, the EU managed to largely wean itself off its heavy reliance on Russian oil (and Russian natural gas) after Vladimir Putin’s regime invaded Ukraine.
Further, the EU imported $393.45 billion worth of goods classified as electrical or electronic equipment last year, and Canada exported $17.05 billion of those goods, so the EU market might well be able to absorb that amount (again, providing the price was right).
Overall, a stronger alliance with Europe, or some form of membership in the EU, could be beneficial for some Canadian industries. But agriculture would be at risk, argued University of Saskatchewan professor Stuart Smyth in an August article in The Western Producer, saying that joining the EU would be an “unmitigated disaster.”
“The EU bans most of the technologies that have enabled Canadian farmers to become the most sustainable producers of crops anywhere on the planet,” Smyth wrote.
Looking the other way, it’s unlikely Canada could come close to filling in for the U.S. as a market for EU-produced goods. At present, the EU accounts for just under 12% of the €48.9 billion ($56.1 billion) worth of goods imported into Canada, mostly vehicles and automotive parts, industrial machinery and technology hardware, and pharmaceuticals, making Canada the EU’s 12th largest export market. Compare that with the €536 billion to €555 billion (around $620 billion) worth of goods the U.S. bought from the EU in 2025 — fully ten times as much. President Donald Trump has talked a big game over levying punitive tariffs against EU goods, but the truth is that the average tariff on EU goods is less than 8% — painful, but nowhere near the eye-watering figures Trump bandied around on “Liberation Day” in April last year.
Canada and the EU may very well wish that teaming up would increase their leverage in the tumultuous trade wars generated by Trump’s insistence that the U.S.’s massive trade deficit represents a “rip off” by its trading partners. But, in practice, they will need to exercise caution not to poke too hard the bear that dominates global trade for now.
