Carney says Canada will pursue ‘unique security and economic alliance’ with EU amid US trade spat

What Happened

At the inaugural Canada Investment Summit on Tuesday, Prime Minister Mark Carney said Canada will pursue a ‘unique security and economic alliance’ with the European Union, pitching Canada as a ‘safe harbour’ for foreign capital and a base in the ‘new global economic order’. He noted Canada is the only non-European member of Europe’s defence procurement initiative and said Canada and the EU are in early-stage talks over possible visa-free travel and work. Carney is scheduled to be guest of honour at the European Parliament’s plenary in Strasbourg this week, attending European Commission President Ursula von der Leyen’s state of the union speech on Wednesday and addressing MEPs on Thursday. European officials seek to bring Canada as close as possible to the EU short of membership, but will not call it associate membership because the EU refuses to split the four freedoms of its single market. Earlier this year, Canada became the first non-European country to join the EU’s €150bn defence loans scheme, giving Canadian defence firms greater supply opportunities.

Key Actors

Why It Matters

The initiative reflects a broader realignment among US allies under trade pressure from Washington, with the EU seeking to deepen ties with Canada without granting membership and Canada diversifying its economic and defence partnerships. Canada’s accession to the EU’s €150bn defence loans scheme as the first non-European country signals a concrete security dimension, while CETA’s stalled ratification reveals internal EU obstacles. EU-Canada trade in goods and services hit €130bn in 2025, an 80% increase since 2016, but US trade remains nearly US$880bn. The outcome could reshape North Atlantic economic and defence relationships and reduce Canada’s dependence on the US, even as Carney concedes the US will remain its largest trading partner.

Watch For

Carney’s address to the European Parliament on Thursday and von der Leyen’s state of the union speech on Wednesday, where new EU-Canada cooperation areas are expected. Monitor whether EU officials outline ‘concrete steps’ on mobility, raw materials, energy, and defence procurement, and whether the 10 EU member states — including France, Italy and Poland — move to ratify CETA ahead of national elections in those countries this year. Also watch US trade responses to any Canada-EU deepening.