Trump threatened the EU with new tariffs over closer ties with Canada

US President Donald Trump threatened to impose new high tariffs against the European Union or restrict trade with it if Washington deems a possible granting of associated member status to Canada by the EU as a hostile move.

The threat came after European Commission President Ursula von der Leyen proposed making Canada the first "associated member" of the European Union. According to Tagesschau and Axios, Trump called the idea "ridiculous" and stated that in the event of intentions he considered unfriendly, the US could respond with "very high tariffs" or stop trade with Europe in certain areas.

At the same time, the American president clarified that he would not object to closer ties between Canada and the EU if he considered the motives positive. He did not explain what criteria Washington would use to determine the parties' intentions.

Von der Leyen's proposal envisages significantly deeper cooperation between Canada and the EU in defense production, technology, energy, artificial intelligence, and the Arctic. At the same time, there is no concrete mechanism for "associated membership" yet. The parties still need to determine what rights and obligations the new format would entail and how far economic integration would go.

Canada already has a large-scale free trade agreement with the European Union, CETA. Axios notes that almost all tariffs on goods between the parties are already eliminated, so the main issues of a potential new format could be access to the services market, regulatory coordination, investment, and deepening defense cooperation.

Trump's new threat came amid a sharp deterioration in trade relations between the US and Canada. According to Bloomberg, after the failure of negotiations last month, Washington imposed 50% tariffs on approximately $20 billion of Canadian goods, and Ottawa responded with roughly commensurate tariffs on American imports.

This week, Washington additionally increased pressure on the neighboring country by restricting the use of Canadian goods in federal government procurement. At the same time, Canada is trying to gradually diversify foreign trade and reduce dependence on the American market, expanding economic ties with Europe and other regions.

Despite this, the US remains a key trading partner of Canada. According to data cited by Axios, last year the American market accounted for more than 70% of Canadian exports. That is why possible deepening of relations with the EU is seen in Ottawa as a long-term strategy, not a quick replacement for trade with the United States.

Bloomberg notes that negotiations on a new format for Canada-EU relations could take years. It is also currently unclear what legal powers Trump could use to implement the new tariff threat against Europe.

Based on materials from: Tagesschau, Axios, Bloomberg