Canada and EU Move Closer as Trade Tensions Rise
Leaders agreed on a new alliance framework and a $1.1 billion AI investment while debating the title of associate member.
By Abigail Brooks ·
The value of European Union imports of Canadian critical raw materials jumped 62% last year to 3.3 billion euros.
Canadian Prime Minister Mark Carney and European Commission President Ursula von der Leyen met in Montreal on Thursday to formalize a new partnership. The two leaders pushed for Canada to become the first associate member of the EU. They also announced the launch of an Alliance for the Future, a framework open to other nations.
Von der Leyen argued that economic relationships are increasingly being used as tools of pressure. She stated that when trade becomes a weapon, families feel the impact on prices for goods like cars and groceries. Carney agreed, saying the alliance helps Canada withstand economic shocks and prevents foreign entities from dictating its choices.
The summit produced concrete economic agreements. Von der Leyen said the two sides would finalize an agreement Friday that gives Canadian startups and researchers access to Europe's network of 12 supercomputers. This move aims to strengthen cooperation on artificial intelligence.
Carney announced that Canada would invest up to C$1.6 billion in the Canadian AI company Cohere. The firm plans to merge with Germany's Aleph Alpha. Carney said the company would remain Canadian and invest at least C$1.7 billion in new computing infrastructure within the country.
The designation of associate member remains a point of contention. Von der Leyen called it an association without accession, noting that geography prevents full membership. Carney downplayed the label, calling it a marketing exercise that does not determine the value of the alliance. However, he used the term during a business roundtable to emphasize economic opportunities.
Some EU member states, including France and Germany, have resisted the specific wording. Anand Sundar, a special adviser at the European Council on Foreign Relations, said the rejection by member states is embarrassing for von der Leyen. He noted that the framing may not survive the summit, though he believes the underlying cooperation will continue.
The United States has reacted to the closer ties. President Donald Trump suggested the arrangement could be a hostile act and threatened tariffs on Europe. A senior Canadian official told reporters the relationship is not directed against the U.S. but reflects shared interests. The White House confirmed that U.S. and Canadian trade officials had discussed the matter in recent days.
Defense cooperation is also expanding. Canada is the only non-European country in the EU's 150-billion-euro SAFE defense procurement program. This allows Canadian companies to join joint European military purchases. However, France wants strict Made in Europe rules that could limit Canadian access, while Germany favors broader participation.
The two nations already have a free trade agreement that eliminated most tariffs. The U.S. accounted for 71.7% of Canada's merchandise exports in 2025. Carney aims to double exports to other countries over the next decade. Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations, said there is no magic shortcut to reducing reliance on the U.S. economy, but the political window is wide open for a bigger step.
