Canada and EU Set to Deepen Ties at Montreal Summit as US Relations Sour

Canada will host the European Union in Montreal on October 29 and 30 for a summit aimed at strengthening strategic and economic ties, at a time when its relationship with the United States has sharply deteriorated. It will be the 21st Canada-EU summit.

The agenda is expected to cover trade, technology, defence, energy, critical minerals, artificial intelligence, research and financial services. Prime Minister Mark Carney, European Commission President Ursula von der Leyen and European Council President Antonio Costa will attend, and a joint statement is expected.

The talks are set to build on the Comprehensive Economic and Trade Agreement (CETA), which took effect in 2017 and, according to the European Council, removes duties on up to 99 percent of goods traded between the two sides. Costa said the leaders would launch an "Alliance for the Future" to deepen political, economic and institutional links.

The timing reflects the impact of US President Donald Trump's tariffs on both Canadian and European exports. Before those tariffs, Canada sent nearly 80 percent of its exports to the US. In August, trade talks between Ottawa and Washington broke down, and Trump imposed a 50 percent levy on $20bn of Canadian goods, about 5.5 percent of Canada's exports. Canada responded with equivalent tariffs on US steel, dairy, appliances, farm equipment, pulp and paper, and electronics.

Carney's office said the EU offers market power, research depth and manufacturing strength, while Canada brings abundant energy, critical minerals, capabilities in space, AI and quantum technology, and one of the world's strongest banking systems. Vina Nadjibulla, co-founder and CEO of the Centre for Strategic Statecraft in Ottawa, expects specific announcements in these sectors. She said the main challenge is how quickly political momentum can become concrete deals and projects.

Defence is already a point of convergence. The EU describes Canada as the only non-European country taking part in Security Action for Europe (SAFE), a 150 billion-euro ($167bn) loan programme that supports defence procurement by member states. An agreement concluded in February gives Canadian firms preferential access in procurements financed under the instrument.

In September, von der Leyen suggested Canada could become the EU's first "associate member", and Carney welcomed the ambition, describing his goal as a "unique alliance" rather than conventional membership. The Centre for European Policy Studies, a Brussels-based think tank, notes that the term does not exist in EU treaties or its standard enlargement framework. Nadjibulla said the label matters less than the practical results.

Both sides have rejected the idea that the effort targets Washington. Von der Leyen told the European Parliament in Strasbourg, in an address Carney attended as the first foreign head of government to do so, that this is "a partnership not against anyone else, but for our common strength." Nadjibulla described it as diversification and resilience building, giving Canada "more choices in an unpredictable world." Former Ontario premier and UN ambassador Bob Rae said talks with the EU are "perfectly normal and not directed at the US."

Trump has nonetheless threatened new tariffs on Europe over the proposal. "If it's a good intention, that's fine. If it's a bad intention, we'll put very heavy tariffs on Europe," he told reporters in Charlotte, North Carolina, in September. He also dismissed the prospect of Canada joining the EU as "laughable" and called Canada a "terrible trade partner."