Trump warns Canada-EU associate status could trigger heavy tariffs on Europe
US president Donald Trump warned Wednesday that Canada becoming an associate member of the European Union could be treated as a "hostile act," threatening retaliatory tariffs on Europe hours after signing an order to strip Canadian goods from US federal procurement contracts.
"If it's a good intention, that's fine. If it's a bad intention, we'll put very heavy tariffs on Europe," Trump told reporters Wednesday evening. He also called Canada a "terrible trade partner" and described talk of associate membership as "laughable."
The remarks followed European Commission president Ursula von der Leyen's State of the Union address to the EU Parliament in Strasbourg, France, where she said she wants to bring the Canada relationship "to the highest level possible" and offered to open the door for Canada to become the bloc's first associate member. Prime minister Mark Carney, seated front row, rose and shook her hand as EU lawmakers applauded.
For wealth managers tracking cross-border exposure, the procurement order carries the more immediate commercial weight. Trump's memorandum directs US federal agencies to identify and remove Canadian-origin products from government purchasing schedules, which the White House says account for more than $50 billion a year. The order followed a Truth Social post a week earlier in which Trump said Canada's "Buy Canadian" procurement rules amounted to a "Canadian Trade Scam."
“The Canadian Government, including Canadian Provinces, have banned American Small Businesses and Companies from selling into their Government Procurement Markets,” Trump wrote. “That is not reciprocity, it is a Canadian Trade Scam.”
Terminology remains unsettled
The Montreal summit, confirmed by the Council of the European Union and Canada's Prime Minister's Office, is where officials are expected to begin defining the substance of any new arrangement. Carney's office said in a September readout that Canada will host the gathering after "one year" of building a new strategic partnership with the EU spanning trade, energy, climate and technology.
Canada's ambassador designate to the EU, Jonathan Wilkinson, told reporters Ottawa is "not there" yet on the associate-member framing, saying details of a new relationship remain "in flux." A readout from the Prime Minister's Office on the Carney-von der Leyen meeting made no mention of associate-member status but referenced a "far stronger, more ambitious alliance."
Conservative leader Pierre Poilievre pressed Carney over the shifting language, saying Canada "must be independent and sovereign" and that his party opposes "no EU taxes, no EU laws, and no EU open-border rules on immigration."
Tariff deadline lands first
A nearer-term deadline falls before the summit. A White House proclamation signed Sept. 8 bans imports of certain Canadian alcohol, dairy and motor-vehicle products effective Sept. 29, escalating measures first imposed in July under Section 338 of the Tariff Act of 1930. US trade representative Jamieson Greer said Canada "walked away from a near-final trade deal" before the ban was announced.
No precedent for the arrangement
There is currently no formal EU treaty status called "associate member," and any path to one would require unanimous approval from the bloc's 27 member states, CTVNews.ca reported. German MEP Tobias Cremer said the two sides need to "stop sending each other love letters and put meat on the bone.”
Separately, Carney said Wednesday that Canada has formally applied for full membership in the UK-led Joint Expeditionary Force, a NATO-adjacent rapid-response coalition, a bid Britain supports.
Between now and the Montreal summit, market participants have two dates to track: the Sept. 29 import-ban deadline and the Oct. 29-30 leaders' meeting where the shape – and possibly the name – of a new Canada-EU relationship is expected to take clearer form.
