Canada, EU pursue broad alliance as US trade war rages; Carney's approval nears record high

Canada, which has hit back against US pressure with retaliatory tariffs, is pursuing a sweeping partnership with the European Union spanning trade to security, Bloomberg reported Tuesday (local time). Support for Prime Minister Mark Carney has surged since he declared a trade war against the United States.

The two sides are expected to formalize the plan soon, according to the Bloomberg report.

European Commission President Ursula von der Leyen is expected to unveil the initiative during her annual State of the Union address in Strasbourg, France, on Sept. 16. Carney is reportedly set to attend the address and then speak to members of the European Parliament the following day.

"The Canadian government has made strengthening ties with the EU a top priority and is actively considering nearly every option except EU membership," a Canadian government official said. The official spoke on condition of anonymity.

The two sides are focusing in particular on cooperation in defense, space exploration and scientific research — areas seen as "strategic capabilities." They are also discussing how to broaden the partnership across trade, security, supply chains and critical raw materials.

Canada last year became the first non-EU country to join the bloc's military procurement fund, contributing 150 billion euros. The push for deeper cooperation comes as the United States and Canada have escalated a trade standoff through a recent exchange of retaliatory tariffs.

At midnight Tuesday, Eastern time, Canada imposed tariffs of up to 50 percent on C$27.6 billion (about $20 billion) worth of US imports.

In a video statement that day, Carney said reducing economic ties with the United States would come at a cost, but he argued the shift was necessary long term. "We have everything we need to change direction and to prosper," he said. "That change comes at a cost, but that cost is far less than the cost of standing still."

Carney's hardline stance toward the US appears to have boosted his approval. The Canadian polling firm Angus Reid Institute (ARI) released a survey that day showing 62 percent of Canadians approve of Carney's handling of government affairs. That marks a rise of 11 percentage points from last month, and it closes in on the all-time high of 63 percent he reached in January, right after his speech at the World Economic Forum in Davos.

At the time, Carney had won praise both at home and abroad for arguing that middle powers needed to act together against "the tyranny of great powers."

Carney's approval rating topped 50 percent in most Canadian provinces except Saskatchewan, reflecting support that cut across party lines.

Separate from support for the prime minister himself, unease persisted over Canada's negotiating position in the trade standoff with the US. Only 31 percent of respondents said Canada held the upper hand, while 34 percent said the country was at a disadvantage — a larger share. Twenty-two percent said the two countries were on equal footing.

Support for refusing to yield to US demands for painful concessions, even at economic cost, climbed to its highest level since the trade war began. Seventy-three percent chose the hardline position that Canada should reject difficult concessions even if it worsens trade relations with the US. Just 27 percent said Canada should take a more flexible approach in future trade negotiations.

Willingness to endure personal and economic pain from the trade war was also clear. Even in a scenario where household costs for groceries and clothing rose 10 to 20 percent, 60 percent of respondents said Canada should stick to its current negotiating strategy.

On timing for returning to the negotiating table, 41 percent said Canada should wait until after the US midterm elections in November. That was more than the 26 percent who favored an immediate return.

ARI conducted the survey online on Thursday and Friday among 1,498 adults across Canada. The margin of error is plus or minus 2.0 percentage points at a 95 percent confidence level.