Canadians have punched above their weight in America’s entertainment field for decades. Among the well-known Canadians are: James Cameron, Celine Dion, Dan Aykroyd, Drake, Eric McCormack, Jim Carrey, Justin Beiber, Keanu Reaves, Keifer Sutherland, Lorne Michaels, Martin Short, Michael Buble, Michael J. Fox, Mike Myers, Pamela Anderson, Ryan Gosling, Ryan Reynolds, Seth Rogan, Sandra Oh, Will Arnett, and William Shatner. Beyond the entertainment industry, most people also realize that Canada has been one of America’s most reliable trading and national security partners as well.

That special relationship changed abruptly when a trading war broke out last year after the U.S. imposed stifling tariffs on some Canadian goods. Canada quickly retaliated with tariffs of their own. The Trump administration believed Canada would tow-the-line because the bilateral trade relationship between the United States and Canada strongly favors the U.S. Canadian trade with the U.S. comprises about one-third of Canada's economy, while it only represents about three percent of the United States's economy. However, Canadian leaders surprised the U.S. As relations soured, they decided it was time to look for trading partners elsewhere. The two obvious choices were increasing trade with China and with the European Union.

Trade with China

Last week, Maninder Sidhu, Canada’s Minister of International Trade, visited China to advance Canada’s work to diversify trade partnerships, create jobs, and support Canadian businesses abroad.[1] His visit was a follow-up to Canadian Prime Minister Mark Carney’s visit to Beijing in January 2026 during which he promoted Canada’s efforts to strengthen trade and investment ties with China. China is a more natural partner for Canada than some people might realize. Over 1.8 million Canadian residents are of Chinese origin and Mandarin is Canada’s fourth most spoken language after English, French, and Spanish.[2] The Canadian government reports, “In 2025, Canada’s bilateral merchandise trade with China totaled $125.7 billion (5.7% higher than in 2024). Merchandise exports of $35.0 billion to China (16.8% higher than in 2024) accounted for 4.5% of Canada’s total merchandise exports in 2025. Canada’s services trade with China is also growing, with our bilateral services trade reaching $13.8 billion in 2025, a 3.6% increase since 2024.”

This year there have been even greater increases in trade with China. Journalist Lisa Xing reports, “Canadian exports to China rocketed by 30 per cent in the first half of 2026, with overall trade up 3.6 per cent year over year, according to Statistics Canada data analyzed by researchers.”[3] She adds, “Energy and minerals dominated, making up 58.4 per cent of all domestic exports to China in that time period, with energy (largely crude oil and liquified propane) alone growing by 81.8 per cent. Metal ores and non-metallic mineral exports (including copper ore) rose 29 per cent.” China will likely remain a strong trading partner with Canada, even if tensions with the U.S. ease. Nevertheless, the Canadian government notes, “While recognizing the commercial potential in China for Canadian businesses, there are also associated risks including market access barriers, opaque regulations with uneven and arbitrary implementation, prevalent and persistent intellectual property theft, and the risk of diversion of sensitive goods and technologies intended for civilian use for military purposes and applications.”

Trade with the European Union

Even before the U.S. imposed tariffs on Canadian goods, journalist Stanley Pignal argued, “Both Europe and Canada may be in the market for upgraded alliances.”[4] He asserted that Canada and the EU have good reasons to join up. He wrote, “Canada is vast and blessed with natural resources but relatively few people, while the EU is small, cramped and mineral-poor. Sure, EU rules reserve membership to ‘European states.’ Yet despite a residual attachment to the frontier spirit, Canadians can be thought of as honorary Europeans.” While tensions between the U.S. and Canada festered, Ursula von der Leyen, the European Commission’s president, on 16 September 2026, endorsed the idea of Canada becoming the first ‘associate member’ of the European Union — never mind that no such category of membership exists. In late October, the EU backed away from the invitation. Nevertheless, following an EU-Canada Summit, a draft joint statement offered “an ever closer association of Canada to the EU, short of full membership itself.”[5]

The reality is, according to journalist Helen Atkinson, “At present, in dollar terms, the EU imports less from Canada than from Kazakhstan.”[6] She then asks, “What does Canada have that the EU could really want?” Her answer, “Possibly its oil, most of which currently goes to the U.S. — at $137.72 billion worth of mineral fuels, oils and distillation products, that’s Canada’s biggest export. … Further, the EU imported $393.45 billion worth of goods classified as electrical or electronic equipment last year, and Canada exported $17.05 billion of those goods, so the EU market might well be able to absorb that amount (again, providing the price was right). Overall, a stronger alliance with Europe, or some form of membership in the EU, could be beneficial for some Canadian industries. But agriculture would be at risk, argued University of Saskatchewan professor Stuart Smyth in an August article in The Western Producer, saying that joining the EU would be an ‘unmitigated disaster.’”

Despite these concerns, strategist Thomas P.M. Barnett observes, “Europe sees more clearly than America what is strategically at stake. The EU looks at Canada and sees a G7 democracy with vast critical-mineral reserves, abundant energy, a highly educated population, advanced research capacity, Arctic access, food security, sophisticated financial and technological sectors, a political culture that fits their model. In short, Europe recognizes a strategic opening when it sees one.”[7] Even so, Atkinson concludes, “Canada and the EU may very well wish that teaming up would increase their leverage in the tumultuous trade wars generated by Trump’s insistence that the U.S.’s massive trade deficit represents a ‘rip off’ by its trading partners. But, in practice, they will need to exercise caution not to poke too hard the bear that dominates global trade for now.”

Concluding Thoughts

Prime Minister Carney is negotiating with the U.S. with open eyes. In a January speech at the World Economic Forum, he said, “Every day we’re reminded that we live in an era of great-power rivalry. That the rules-based order is fading. That the strong can do what they can, and the weak must suffer what they must. … The middle powers must act together because if we’re not at the table, we’re on the menu.”[8] In a more recent address at the UN, Carney noted, “The alternative that Canada and many others are pursuing, is values-based realism, an approach that’s both principled and pragmatic.”[9] Despite on-going tensions, talks between the U.S. and Canada are moving forward. Last week leaders of both countries announced that progress is being made.[10] Nevertheless, Carney has indicated “he is not in a rush to reach a trade truce with Trump and is prepared to wait for a new American president to take office in 2029, if necessary, rather than accept a bad deal for Canadians.”[11] Despite this hopeful note, journalist Kate Nishimura reports, “Exporters and importers across the United States and Canada are ‘weary’ and ‘decidedly glum’ in the face of continued political pressures that threaten the future of cross-border trade.”[12]

Footnotes

[1] Staff, “Minister Sidhu to advance Canada’s trade and investment priorities during visit to China,” Government of Canada, 2 November 2026.

[2] Staff, “Canada-China relations,” Government of Canada.

[3] Lisa Xing, “Amid Trump trade war, Canada's exports to China up 30% in first half of 2026,” CBC, 14 September 2026.

[4] Stanley Pignal, “Why Canada should join the EU,” The Economist, 2 January 2025.

[5] Lisa O’Carroll and Leyland Cecco, “EU backs away from offer to Canada to start ‘associate member’ talks,” The Guardian 28 October 2026.

[6] Helen Atkinson, “Canada and the EU: A Genuine Alternative Trading Relationship? Or a Foolish Dream?” SupplyChainBrain, 17 September 2026.

[7] Thomas P.M. Barnett, “I Told You How to Do It Already,” Thomas P.M. Barnett’s Global Throughlines, 19 September 2026.

[8] Matina Stevis-Gridneff and Ian Austen, “Canada Flexes on Global Stage With an Eye to Its Own Survival,” The New York Times, 20 January 2026.

[9] Ian Austen, “At U.N., Carney Lays Out a Broad Plan for a Divided World,” The New York Times, 22 September 2026.

[10] Max Rego, “Trump says aides have ‘concept’ of Canada trade deal,” The Hill, 2 November 2026.

[11] Oliver Ward, “Mark Carney says US, Canada teams will work on trade deal in ‘coming weeks’,” Politico, 1 November 2026.

[12] Kate Nishimura, “US, Canadian Importers and Exporters ‘Decidedly Glum’ Over Future Prospects for North American Trade,” Sourcing Journal, 2 November 2026.