EU-Canada Comprehensive Economic and Trade Agreement (CETA)

In an exclusive interview, European Union Trade Commissioner Maroš Šefčovič told Euronews that the EU is not in a position to mediate in the trade war between Canada and the United States following the collapse of their trade talks.

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Ten days ago, Canadian Prime Minister Mark Carney walked away from the negotiations with the Trump administration, blaming them for pressuring Canada over the use of the French language.

In the following days, US President Donald Trump announced 50% US tariffs on Canadian cars and trucks, to which Ottawa retaliated with tariffs on more than 700 US imports, worth about $20 billion (€17.2 billion).

“I don’t think that we are in a position to mediate,” Šefčovič said. “At the same time I know that they [Canada and the US] have such a close economic relationship that, despite the current tension, sooner or later there will be attempts to resolve it.”

The Commissioner added that “tariffs are taxes which are paid in the end by the economic operators or by the citizens”, a message he has reiterated several times over the last year during the EU’s own trade dispute with Washington.

“We clearly support free and fair trade with the lower or no tariffs at all,” he told Euronews.

Ready to cooperate

Since the trade talks stopped, Carney has called for a closer relationship between Ottawa and Brussels and announced he will attend European Commission President Ursula von der Leyen’s State of the Union in Strasbourg in mid-September, one of the main events in Brussels’ political calendar.

An EU-Canada summit is also scheduled for later this autumn.

Šefčovič said the Commission is ready to explore “all possibilities” to increase cooperation with Canada, but he added that any new arrangements “would very much also depend on how comfortable the Canadian side would feel and what is its level of ambition”.

He pointed out that after Brussels clinched a trade deal with Ottawa in 2016, trade between the EU and Canada grew by 75% – but he also suggested that the deal could be pushed further.

“On both sides, we have certain elements which we can improve, still certain barriers, certain sensitivities for the products. I really think that we can explore much more that.”

Šefčovič said that a digital agreement might be signed with Canada before the end of the year, and he also cited coming cooperation in critical raw materials with potential joint investments.

Ottawa is seen by Brussels as a like-minded partner sharing its vision of the new global trade order, and Šefčovič hopes to have its backing to get closer to members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which has liberalised trade between 12 countries in the Asia-Pacific region and the Americas, including Canada – but not the US. The UK became the pact’s first and to date only European member in 2024, with Canada ratifying its full accession as of 1 September.

“Canadians are very important partners for forging a new level of cooperation with the CTPPP,” Šefčovič said, “which represents together 40 percent of global trade.”

With the trade war with the US heating back up, Canada’s Prime minister Mark Carney has delivered another pledge to deepen his country’s economic and security partnership with the EU.

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His statement came after trade talks between Ottawa and Washington collapsed last week, with Canada accusing the US of interfering in its sovereignty by demanding French-language concessions.

In retaliation, US President Donald Trump said on Truth Social that on 1 January 2027, tariffs on cars and trucks will be increased to 50%.

“WE DON’T NEED CANADA, THEY NEED US!” he wrote. “They do 95% of their business with the US, with us, the exact opposite!”

Canada announced later that, as of 8 September, it would enact tariffs ranging from 15% to 50% on over 700 American imports, worth about $20 billion (€17.2 billion).

Since Trump’s return to power in 2025 and his repeated attacks on US-Canada trade relations, Ottawa has been turning several times towards the EU, seeking a stable relationship with a “like-minded” partner.

“This fall we will begin intense discussions with the European Union, the world’s second-largest economy, to build a much stronger and deeper economic and security partnership,” Carney said on Monday.

The Canadian Prime minister has confirmed, according to Politico, that he will attend the State of the EU speech in Strasbourg on 16 September after European Commission President Ursula von der Leyen invited him before the trade war with the US broke out.

Since the start of the second Trump administration, Brussels and Ottawa have shared a common objective: diversifying their trade relations away from Washington. But since the EU and Canada are already bound by a trade agreement, how far could a deeper relationship go?

The truth is that both sides have their limits.

Intertwined Canadian and US markets

From critical raw materials to energy and defence, the last months have seen multiple areas of interest come to the fore, and they will likely set the agenda at the Canada-EU summit this fall.

Canada is planning to offer the EU better access to its critical raw materials. Brussels is desperate to move away from China, which holds the monopoly on the production and processing of rare earths. With strong domestic supplies of lithium, graphite and nickel, Ottawa has a lot to offer to integrate the EU into its metal value chain.

Canada might also make offers on energy, which it currently supplies principally to the US.

“We should be talking about a more viable Canada-EU corridor for energy, and not just in respect of oil and gas, but also of nuclear,” Mark Camilleri, President of the Canada-EU Trade and Investment Association, told Euronews. “The EU’s energy needs are increasing, and its energy supply is still very dependent on imports.”

On defence, Canada is already part of SAFE, the €150 billion defence instrument that supports EU member states that wish to invest in defence industrial production through common procurement. But defence cooperation is already set to go further, with Canada selecting German-Norwegian TKMS to build a new fleet of 12 submarines. Deepening the relationship on Arctic security could be another area of collaboration.

Canadian business, meanwhile, is increasingly interested in the European market, but the diversification will not come overnight. Geography, after all, matters.

“The Canadian economy is very much oriented and integrated to the US and North American economy,” Camilleri added. “We are not looking to untangle the relationship, despite the very distressing political issues taking place.”

The Europeans will also put limits on integration with Canada. The trade agreement struck in 2016 is proof enough that the EU market is not easy to access: the deal has not yet been ratified by all EU member states, and has only been provisionally applied since 2017.

Faint EU membership hopes

Geography matters not only for the Canadians, but also for the EU.

Article 49 of the Treaty on European Union opens membership to “any European State”. Morocco was not considered European enough in the past to become a member, so how could Canada, located much further away, be considered a “European state”?

Guntram Wolff, senior fellow at the Brussels-based think tank Bruegel, points out that there is a new openness in Brussels, and that a strategic alignment “could go far”, even if probably it has to fall short of full membership.

Liberalising trade further than what the current agreement involves could be an option. But how far could the integration of the Canadian market into the EU go?

“One can go to the point where Norway is, which is a single market membership,” Wolff told Euronews. “Whether that is where Canada wants to go and whether that’s where all the European countries want to go, we will see in the coming weeks.”

Norway, Iceland and Liechtenstein are members with EU member states of what is called the “European Economic Area”, membership of which involves the implementation of the EU’s four freedoms – free movement of goods, persons, services and capital. These freedoms form the basis of the single market.

But an EU official told Euronews that this option was not on the table yet, and remains a theoretical debate for now.