Canadian Prime Minister Mark Carney addressed the European Parliament in Strasbourg yesterday, welcoming the European Union’s (EU) proposal to make Canada its first-ever “associate member”. He welcomed closer ties between Canada and the EU. While the full details of what that means is still up in the air, it likely points to a sweeping alliance spanning trade, energy, critical minerals and defence. This comes as Canada looks to diversify away from the US.

• The proposed alliance, unveiled by European Commission President Ursula von der Leyen a day earlier, would deepen co-operation on trade, student and worker mobility, critical minerals and energy, AI safety standards and joint Arctic projects.
• Carney's message was that a Canada and EU alliance can help protect the values both sides hold close, including sovereignty, territorial integrity and its open markets.
• US President Donald Trump blasted the proposal as “laughable” and warned he would impose significant tariffs or even halt trade with Europe if he deems it to be a hostile act towards the US.
• Carney countered that he believed the alliance with the EU would make Canada a “better partner for the US.”
• The alliance is not close to being final. Carney said the enhanced partnership will still need to go to a debate and final vote in Canada's Parliament before it can move ahead.

Yesterday's speech signals how far Canada is willing to go to hedge against a deteriorating US relationship, but the road from proposal to ratified alliance is still long. Furthermore, Trump's pushback suggests Washington won't be a passive observer. Trade activity between Canada and the EU rose in 2025. The EU is Canada’s second largest trade partner.

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