Trump threatens to unleash new tariffs on EU over Canada associate membership proposal, calls move ‘hostile act’

US President Donald Trump has warned that the European Union could face significantly higher tariffs if Canada’s proposed associate membership of the bloc is intended to disadvantage the United States, escalating tensions over Ottawa’s efforts to deepen economic ties with Europe.

Trump, speaking on Wednesday, said Washington’s response would depend on the intentions of European leaders. “If it's a good intention, that's fine. If it's a bad intention, we'll put very heavy tariffs on Europe,” he said.

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The US president also suggested that Washington could restrict trade with Europe in certain areas, adding another potential flashpoint to relations already strained by tariffs and disagreements over trade policy.

Trump described the prospect of Canada joining the EU as “laughable” and criticised the United States’ northern neighbour as a “terrible trade partner”. His comments came after European Commission President Ursula von der Leyen proposed making Canada the bloc’s first associate member, an arrangement that would bring Ottawa closer to the EU without granting it full membership.

The proposal has added a new dimension to Canada’s trade and diplomatic relationship with the United States. Canadian Prime Minister Mark Carney is scheduled to address the European Parliament on Thursday, with his speech expected to draw attention from both European leaders and the White House.

Canada-EU associate membership proposal gains momentum

Von der Leyen made the proposal on Wednesday, calling for Canada and the EU to take their relationship beyond their existing free trade agreement. She proposed an “Alliance for the Future” encompassing a “common prosperity and economic security space.”

The proposed associate membership would represent a new status for the EU. Such a position does not currently exist in the bloc’s treaties and would need to be created through negotiations.

The precise scope of associate membership remains to be negotiated. The two sides are expected to discuss the proposal at a Canada-EU summit in Montreal on October 29-30, which Carney will host with European leaders.

The proposed arrangement comes as Canada seeks to reduce its dependence on the US economy. For generations, Ottawa built its economy around integration with its southern neighbour. Trump’s tariffs, demands for economic concessions and repeated references to Canada becoming the 51st US state have encouraged the Canadian government to seek closer economic, political and security ties with Europe.

Canada sends roughly 70% of its exports to the United States, leaving it particularly exposed to changes in US trade policy.

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Trump tariffs put Canada-US trade ties under pressure

The Canadian government has retaliated against US tariffs and rejected demands that Carney says threaten Canadian sovereignty. Europe, meanwhile, has taken a different approach to its trade dispute with Washington, shelving retaliation and accepting tariffs of up to 15% on most EU exports to the United States.

Trump’s latest warning suggests that the proposed Canada-EU relationship could become part of the wider trade dispute between Washington and Brussels. His remarks leave open the possibility of additional tariffs if the United States concludes that the arrangement is intended to undermine American commercial interests.

The US president’s comments also raise questions about whether Washington could seek to limit trade with Europe in specific sectors. He did not identify which areas could be affected.

Carney’s address to the European Parliament will be closely watched for indications of how directly he intends to challenge the US president’s trade policies. At the World Economic Forum in Davos in January, Carney warned that economic dependence could allow larger powers to exert pressure on smaller countries.

“When countries negotiate alone with a dominant power, ‘we negotiate from weakness. We accept what is offered,’” Carney said at the time.

Trump rebuked him the following day. His latest comments could add further strain to the relationship as Carney prepares to speak before European lawmakers.

European leaders have shown interest in closer cooperation with Canada across several areas. The two sides have discussed energy, critical minerals, artificial intelligence and digital trade.

Canada has also taken a step towards deeper European integration by becoming the first non-European country to join the EU’s 150-billion-euro ($173-billion) SAFE defence procurement programme this year. The programme gives Canadian companies access to joint procurement as Europe increases defence spending.

Carney, who was seated in the front row of the European Parliament chamber during von der Leyen’s proposal, nodded and rose to embrace the European Commission president as lawmakers gave the announcement a standing ovation.