Trade War

Canadian PM Carney announces progress in Canada-US trade deal talks ahead of US midterm elections on November 3.

Canadian Prime Minister Mark Carney has announced progress towards a future trade deal with the United States, which could help ease tensions between the two North American neighbours.

The Sunday announcement came just two days before the November 3 US midterm elections, which will determine control of the US Congress.

“Good conversation with US President Donald Trump on the future of Canada-U.S. trade,” Carney posted on X on Sunday.

Ties between Ottawa and Washington have been strained by an escalating trade war, with Canada and the US imposing billions of dollars in tariffs on each other’s goods in recent months.

“Teams from both countries will be working in the coming weeks to deliver that outcome,” Carney said. “This builds on recent constructive discussions on the outlines of a mutually beneficial trade deal.”

In his second term, Trump has upended global trade by imposing tariffs on many of the US’s allies, including Canada – one of the US’s biggest trading partners.

In August, high-level trade talks between Ottawa and Washington broke down, and Trump imposed a 50 percent levy on $20bn of Canadian goods, or 5.5 percent of its exports. Canada responded with equivalent tariffs on US steel, dairy, appliances, farm equipment, pulp and paper, and electronics.

Trump said last week that he expected a new trade agreement with Canada to be reached “pretty soon”, but offered no details.

The trade tensions with Canada have become an issue in the midterm elections, particularly in Michigan and Maine, where Republican candidates have faced pressure over tariffs that have hurt local businesses.

Canada has sought to diversify its trade options and recently welcomed a European Union offer to become an “associate member”.

Carney praised the proposal’s ambition, describing his goal as a “unique alliance” rather than conventional EU membership.

Both sides signed a digital trade deal, as Trump’s trade threats push Washington’s allies to seek closer ties elsewhere.

The European Union and Canada have launched what they described as an Alliance for the Future, as Ottawa prepares to become the bloc’s first so-called “associate member”.

Prime Minister Mark Carney hosted the Canada-EU summit in Montreal and signed a digital trade deal, alongside other agreements. Also at the Friday summit were European Commission President Ursula von der Leyen and European Council President Antonio Costa.

The term “associate member” has no legal basis and is contested by some EU states. However, its use underscores the desire of Canada and the EU to forge closer relations, as United States President Donald Trump continues to threaten Washington’s traditional allies with trade tariffs if they do not play by his rules.

“Canada and the EU are working to establish the closest possible partnership, which will be far from full membership, but which will make Canada the first associate member of the European Union,” Carney posted on X.

“Today in Montreal, we have taken a major step forward by establishing more than twenty measures that will increase affordability, create opportunities and ensure our sovereignty on both sides of the Atlantic.”

In a joint statement following the summit, the two sides announced an agreement under which the European Investment Bank will invest in critical Canadian resources, particularly raw minerals. They also said they would advance cooperation on artificial intelligence security and safety.

“A more dangerous and divided world has fundamentally changed the requirements of sovereignty. It is no longer enough for nations to feed, fuel and defend ourselves,” the statement said.

It added that “true sovereignty” requires secure access to critical minerals, semiconductors, payment systems, energy, vaccines, space-based communications and AI.

Ukraine was also on the meeting agenda, with Carney announcing Canada’s participation in the EU’s 90 billion euro ($103bn) support loan for Kyiv. Carney said Canada would make an initial contribution of 500 million euros ($558m).

Opportunities for students in Canada and the EU were also discussed. Both sides said they would launch negotiations aimed at deepening Ottawa’s participation in Erasmus+, the EU’s flagship student exchange programme.

Carney and Trump are currently engaged in a trade dispute, with talks under way to reach a deal between the two countries.

MONTREAL — Prime Minister Mark Carney called Canada “the most European of non-European countries” early in President Trump’s trade war. Now, he’s hosting European leaders to pursue an unprecedented alliance, but the proposed European Union “associate member” designation faces resistance even as the EU’s top official champions it.

European Commission President Ursula von der Leyen and European Council President António Costa are in Montreal for a two-day summit aimed at deepening trade, defense and economic ties as Canada and Europe seek to reduce their dependence on Washington in a changing world order.

Speaking in Montreal on Thursday, Von der Leyen warned that economic relationships once considered sources of stability were increasingly being used as instruments of pressure. Without naming Trump, she described the consequences for ordinary families and warned that national sovereignty was under threat.

“When trade becomes a tool of economic pressure, it is families that pay the price, from the supermarket shelf to the cost of a new car,” Von der Leyen said. “We are seeing in real time our sovereignty being attacked.”

She warned that dependence on a single supplier for energy, semiconductors or critical minerals could be exploited and said countries faced a choice between acting alone or working with trusted partners to protect their economic security.

Trump has suggested Canada’s proposed EU arrangement could be a “hostile act” and threatened tariffs on Europe if he considered it unfriendly. Asked Wednesday about possible retaliation, a senior Canadian government official told reporters the closer relationship was not directed against the United States but reflected long-standing shared interests.

The summit puts Carney’s vision for a new global order to the test. At the World Economic Forum in Davos, Switzerland, in January, he warned that the U.S.-led international order was breaking down and urged middle powers to unite against economic coercion.

Von der Leyen stands by her plan for Canada’s new status

The structure and even the name of the proposed partnership remain unsettled, with some EU member states questioning the “ associate member ” designation proposed last month by Von der Leyen.

Despite resistance from EU member states, Von der Leyen showed no sign of abandoning the idea.

“Canada cannot become a full-fledged member of the EU because of geography, but we both want to bring our relationship to the highest level possible,” she said. “This is why we are discussing the idea of Canada becoming the first associate member of the European Union.”

Von der Leyen described the proposed relationship as an “association without accession,” saying it could bring Canada closer to EU membership than any previous arrangement with a country outside the bloc. She said the arrangement would deepen cooperation on everything from artificial intelligence and energy to defense and trade.

Anand Sundar, a special adviser at the European Council on Foreign Relations, said France and Germany are among the countries unhappy with the designation and that it may not survive the summit.

“The fact that member states have rejected the associate membership framing is very embarrassing for Von der Leyen,” Sundar said.

More talks ahead, Carney said

Carney said Tuesday the summit would be followed by further negotiations over the next year.

“It doesn’t matter about specific names or nomenclature,” Carney said. “What matters is the difference that it will make to lives of Canadians.”

Carney said the partnership could create new opportunities for Canadian students, businesses and researchers while strengthening the country’s independence and sovereignty.

Carney has ruled out formally joining the EU, saying any enhanced partnership would require approval by Canada’s Parliament.

An alliance without membership

The summit is expected to launch an “Alliance for the Future,” a framework for closer cooperation on trade, defense, critical minerals, technology and research.

Von der Leyen said Canada and the EU would finalize an agreement Friday giving Canadian companies, startups and researchers access to Europe’s network of 12 advanced supercomputers, strengthening cooperation on artificial intelligence.

She also announced plans to strengthen strategic supply chains and encourage joint investment in industries critical to economic security.

The partnership could expand opportunities for Canadian students and researchers through the EU’s Erasmus+ and Horizon Europe programs and make it easier for professionals to work on both sides of the Atlantic.

European commissioners and Canadian Cabinet ministers will hold sector-specific meetings, beginning with a business forum Thursday before formal leaders’ talks Friday. Officials hope to develop the broader partnership for possible endorsement next year.

A changing world order reshapes economic and defense ties

Canada is the only non-European country participating in the EU’s $167-billion SAFE defense procurement program, allowing Canadian companies to take part in joint European military purchases.

But deeper defense cooperation faces obstacles. Sundar said France is pushing for strict “Made in Europe” rules that could limit Canadian companies’ access to future EU defense spending, while Germany favors broader participation. He said negotiations over the EU’s next seven-year budget could prove more consequential for Canada than anything announced in Montreal.

The two sides already have a sweeping free trade agreement, known as CETA, that eliminated most tariffs. Most provisions have been in force since 2017, although some EU member states have yet to ratify it.

The United States accounted for 71.7% of Canada’s merchandise exports last year. Carney wants to double exports to other countries over the next decade.

Canada and the EU are seeking closer cooperation on critical minerals as both sides work to diversify supply chains. Von der Leyen said the value of EU imports of Canadian critical raw materials rose 62% last year to 3.3 billion euros, including lithium, cobalt, nickel and graphite.

Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations, said the disagreement over terminology was unlikely to derail closer cooperation.

“There is no magic shortcut to rapidly reducing Europe’s and Canada’s reliance on the U.S. economy and military — not least since Washington might retaliate,” Gehrke said. “But the political window is now wide open to take a much bigger step than was previously conceivable.”

Gillies writes for the Associated Press.

The United States has accused Canadian politicians of trying to influence its midterm elections, pointing to Canada’s efforts to push back against President Donald Trump’s tariff campaign.

In a fact sheet released on Wednesday, the US embassy accused Canada of being dismissive of its allegations of election interference.

“The Canadian government brushes off concerns about potential interference in U.S. elections, even as its ministers and premiers openly describe plans to influence American politics in official documents and public appearances,” the fact sheet reads.

The two countries have been locked in a trade war since the start of Trump’s second term in 2025, with Canada responding to US tariffs with import taxes of its own.

But the US embassy identified public statements about the tariffs as being attempts to sway the November 3 midterm election.

Among the politicians singled out in the fact sheet was Canadian Industry Minister Melanie Joly. The fact sheet pointed to comments Joly made in August about responding to Trump’s tariffs.

“We’re also targeting products that will target states in the US. And so we’re being wise and strategic to put political pressure,” Joly said at the time.

The embassy also took issue with Joly’s meetings with Democratic officials in Boston and Chicago in September. When asked by a reporter what she thought might happen with regard to tariffs if Democrats won the midterms, she said, “That’s exactly why I’m meeting so many governors and potential presidential candidates.”

Joly has rejected the suggestion that her actions could amount to interference, saying Canada would never meddle in US elections. She said her meetings with US politicians, both Democratic and Republican, were about building Canada’s economy.

“Fundamentally, what I’ve done in the US is to attract investments,” she told reporters on October 14.

The embassy also pointed to Ontario Premier Doug Ford’s calls for retaliatory measures on US products, as well as his government’s advertising campaign against Trump’s tariffs, launched last year.

The campaign, which featured clips of former US President Ronald Reagan criticising tariffs in a 1987 radio address, prompted Trump to call off trade talks with Canada in October 2025.

While the embassy laid out several examples of Canadian officials trying to influence US trade policy, it didn’t explain how those efforts amounted to interference.

Other instances of alleged election interference included Liberal MP Anthony Housefather saying he had campaigned in Florida on behalf of Democratic Representative Debbie Wasserman Schultz, ahead of her primary election in August.

The fact sheet also accused individual Canadians of illegally participating in US elections, naming 11 people who had been charged or sentenced for voting between 2012 and 2024.

The sheet did not, however, present any evidence linking those citizens to a Canadian government effort to involve itself in US elections.

“All Canadians should refrain from attempting to participate in or influence U.S. elections in any way,” the US embassy’s statement said. “Americans decide America’s elections.”

The fact sheet comes a week after US Ambassador to Canada Pete Hoekstra said Washington was closely watching Canada for signs of interference ahead of the midterms.

“We’re monitoring it, we’re evaluating it and if some of it becomes election interference then America will respond to it,” Hoekstra said in a podcast interview on The Really Big Show, according to The Canadian Press.

The US and Canada have long been allies, but relations have frayed since Trump returned to office.

Not only has the Republican leader triggered a trade war with Canada, but he has also repeatedly threatened to make Canada a 51st state.

There have also been reports that separatist leaders from Alberta had sought support from Trump administration officials ahead of a failed referendum on the province’s independence this week.

Ahead of Monday’s provincial vote, Canadian Prime Minister Mark Carney addressed concerns about potential US interference in the referendum, saying Canada expected foreign governments to stay out of its elections.

“Our expectation is, to be absolutely clear, on foreign governments, United States included, is we don’t get ourselves involved in their elections, they don’t get themselves involved in our elections,” he told Global News.

Al Jazeera has reached out to the Prime Minister’s Office and Global Affairs Canada for comment, as well as the office of Ontario Premier Doug Ford and Industry Minister Joly.

The lawsuit argues Trump bypassed Congress and misused a century-old law to impose sweeping tariffs on Canadian imports.

A US food importer is suing US President Donald Trump over his 50 percent tariffs on Canadian goods, arguing he lacks the legal authority to impose sweeping tariffs without congressional approval.

Gellert Global Group, a New Jersey-based company that imports Canadian cheese, filed the lawsuit on Tuesday in the US Court of International Trade in New York.

The company says the tariffs are driving up its costs and disrupting its relationships with suppliers on both sides of the border. Between September 16 and October 11, Gellert had paid more than $520,000 in duties, according to the complaint.

“Gellert Global Group has spent generations building trusted relationships with suppliers, customers and partners across the food industry,” said Thomas Gellert, the company’s co-chief executive officer, in a press release. “These tariffs disrupt those relationships overnight and create costs and uncertainty that ripple through the entire supply chain.”

The lawsuit challenges Trump’s decision to use a Depression-era law to impose tariffs on a wide range of Canadian products, including dairy products, furniture, clothing and wine.

Trump first imposed the 50 percent tariffs over the summer, accusing Canada of discriminating against American-made cars, alcohol and dairy products. He expanded the measures in September, adding more products in response to Canadian retaliatory tariffs.

The lawsuit argues that the law doesn’t apply to the Canadian policies the Trump administration says are discriminatory, since two of them “arose in response to the president’s own tariffs, while the third involves Canadian dairy policy governed by the US-Mexico-Canada Agreement (USMCA)”.

It also questions why Canadian cheese is being taxed over disputes involving alcohol and cars.

“No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs or import bans without the limits Congress required,” said Sara Albrecht, chairman and CEO of the Liberty Justice Center, a nonprofit legal organisation that filed the suit on Gellert’s behalf.

The White House did not immediately respond to a request for comment, according to the Reuters news agency.

At the centre of the case is Section 338 of the Smoot-Hawley Tariff Act of 1930, which allows the president to impose tariffs of up to 50 percent on imports from countries found to discriminate against American businesses.

The provision had never been used until Trump invoked it this year.

The lawsuit argues that newer laws passed by Congress since then, such as Section 301 of the Trade Act of 1974, require investigations, public comment and other safeguards that Gellert says the Trump administration has bypassed, and that these override Section 338.

“The administration cannot skip those protections by reaching for a 1930 statute that no president had ever used to impose a tariff,” said Jeffrey Schwab, the Liberty Justice Center’s senior counsel and director of litigation.

In addition, the lawsuit says that even if Trump is allowed to use the older law, he hasn’t met its requirements, including waiting 30 days before tariffs can be collected on new products added to the list.

The administration only waited seven days to start collecting tariffs on cheese in September, according to the lawsuit.

Gellert is asking the court to declare the tariffs illegal, stop them from being collected, and order refunds with interest for importers who have been impacted.

The lawsuit marks the fourth major legal challenge to Trump’s tariffs.

In February, the US Supreme Court struck down most of the tariffs he imposed in 2025, and a trade court later ruled against a temporary 10 percent global tariff. A separate challenge to tariffs imposed over alleged forced labour in international trade is still pending.

Talks will focus on the €1 billion daily deficit and rare earth export restrictions.

European Trade Commissioner Maros Sefcovic has arrived in Beijing for talks on the European Union’s (EU) growing trade deficit with China.

Sefcovic will meet Chinese Commerce Minister Wang Wentao on Thursday and Friday after months of discussions over the EU’s trade deficit of more than €1bn ($1.12bn) daily, as well as Chinese curbs on exports of rare earths and other critical minerals.

Meanwhile, Chinese companies are increasingly challenging Europe’s top car brands. China rejected the EU request for voluntary curbs on Chinese hybrid car exports as the two sides enter negotiations, the Financial Times reported on Wednesday. The European Commission now hopes to get Beijing to accept a unilateral EU measure to cap hybrid imports instead, the outlet said, citing two diplomats briefed on the plan.

The two days of discussions come just as a majority of EU lawmakers called for a more assertive trade policy towards Beijing in a non-binding resolution on Wednesday. China vowed a “resolute response” to safeguard its industries if the European Union goes ahead with restrictions against Chinese companies or products, according to its commerce ministry.

Germany and France propose rapid EU measure

French President Emmanuel Macron and German Chancellor Friedrich Merz, leaders of the bloc’s two biggest powers, on Tuesday urged the EU to prepare a “credible instrument” that could be quickly activated to strike back against countries that harm the bloc economically.

The new measure would not target any specific country. German officials said the EU needed a tool as powerful as the Section 301 tariffs imposed by the United States or China’s restrictions on critical-mineral exports.

The proposed weapon – to be discussed at an EU leaders’ summit next week – would give the European Commission the power to respond to a trade aggression within days.

China responded to the letter by urging Paris and Berlin to steer clear of “protectionist” measures.

“We hope that France and Germany, as major economies in the world, will uphold openness, cooperation and free trade,” the commerce ministry said in a statement.

“They should avoid going down the wrong path in the wrong way, only to ultimately suffer the consequences themselves.”

G20 finance leaders, except China’s, agreed in September to act against “non-market” distortions that exacerbate imbalances. Beijing says that hyping up issues such as economic imbalances and overcapacity is a form of protectionism designed to exert pressure on and restrict China.

Ongoing trade talks

EU and Chinese officials have been discussing trade imbalances since June. Sefcovic said he wanted “tangible results by October” as well as some form of commitment that can be put to EU leaders meeting in Brussels.

Trade relations with China top the summit’s agenda next week, as ballooning debt has prompted auditors to warn about the next seven-year EU budget and has spurred protests in France.

European Commission President Ursula von der Leyen told the European Parliament last month that the trade imbalance had reached a tipping point and that Europe would use every tool at its disposal to rebalance the relationship.