Carney Says ‘Canada Strong’ As Trump Tariffs Push Ottawa Closer To Europe

Canadian Prime Minister Mark Carney has said Canada is becoming more economically independent of the United States as Washington faces higher borrowing costs and Ottawa moves closer to Europe, including a proposal for Canada to become the European Union’s first “associate member”.

Returning from a week of meetings in Europe, Carney told Liberal lawmakers in Ottawa on Friday that Canada and Europe had “launched a process for a new alliance”. He also described the latest US tariffs as a “miscalculation” and defended his government’s decision to suspend trade talks with Washington last month.

“Amidst this global rupture, we must move forward,” Carney said.

Carney, a former governor of the Bank of Canada and Bank of England, highlighted Canada’s fiscal position while pointing to the gap between Canadian and US government borrowing costs.

“We are strong. We are Canada strong,” he said, arguing that financial markets were beginning to distinguish between stronger and weaker economies.

His comments followed a diplomatic push to deepen ties with Europe. During his visit, Carney addressed the European Parliament in Strasbourg and backed a broader Canada-EU partnership covering energy, critical minerals, defence, artificial intelligence and research.

European Commission President Ursula von der Leyen has proposed opening the door for Canada to become the EU’s first “associate member”. However, the concept has no established legal status within the bloc, and questions remain over what such an arrangement would actually involve. Ottawa has also sought to emphasise practical cooperation rather than the label itself.

The initiative comes as relations with US President Donald Trump remain strained. Trump has imposed tariffs on Canadian goods, repeatedly raised the idea of Canada becoming the 51st US state and threatened further economic measures. Trade negotiations remain suspended.

Carney is instead promoting investment at home. At Canada’s first Investment Summit this week, his government announced a Productivity Mega Deduction that cuts the effective tax rate on new investment to 6.4%, less than half the US rate. The summit also generated nearly C$500 billion in investment commitments.

“We didn't need a big beautiful bill. We needed a targeted initiative,” Carney said, in an apparent reference to Trump’s signature tax and spending legislation.

He also highlighted a major clean energy project in Newfoundland and Labrador, Quebec and federal territory that he said would have the equivalent capacity of “18 Hoover Dams”.

The next major test of Canada’s European strategy will come at the Canada-EU summit in Montreal on October 29-30.

“In the last seven days, we have stood shoulder to shoulder with an ally, we've catalyzed record investment into our country, we've deepened our ties with Europe,” Carney said.

“It's a lot, but that was the warm-up.”