Canada fights Trump tariffs alone as middle powers alliance fails first test

When Mark Carney stood at the World Economic Forum in Davos last January and urged the world's middle powers to form a common front against economic coercion, the Canadian prime minister framed it as a strategic necessity. Seven months later, that alliance exists mainly in speeches. The United States has imposed 50 percent tariffs on $20 billion of Canadian goods, threatened the same rate on vehicles and parts from January, and Ottawa's would-be partners have largely stayed silent.

Canada's retaliation took effect on 8 September. Dollar-for-dollar counter-tariffs now target American steel, dairy products, appliances, agricultural equipment, pulp, paper and electronics. In parallel, the federal government rolled out C$7.5 billion in financing, liquidity support and income protection for the sectors caught in the crossfire. The numbers are significant for an economy of 41 million people, but they are a fraction of the two-way trade that crosses the world's longest undefended border every day.

The alliance that didn't materialise

Carney's Davos proposal was explicit: pro-trade democracies should coordinate to raise the cost of coercion. The European Union, the United Kingdom, Japan, Australia and the 12-nation CPTPP bloc were the natural candidates. Since Ursula von der Leyen floated deeper EU-CPTPP ties at a June 2025 summit, the two groupings have launched talks on a digital trade agreement and agreed to explore a mutual standstill on tariff increases. Vina Nadjibulla, who heads the Ottawa-based Centre for Strategic Statecraft, described the progress as meaningful but incomplete. The political alignment is increasingly there, she said, but the institutions and instruments need to catch up.

When the test arrived, the coordination vanished. Bernd Lange, chair of the European Parliament's trade committee, issued a statement of solidarity. The European Commission, national leaders and the British government did not. Asked whether the EU would stand with Canada, deputy chief spokesperson Arianna Podestà replied that the U.S. and Canada are both important trade partners and Brussels works closely with both to maintain stability and predictability in transatlantic and global trade. The Commission opposes tariffs as taxes paid by importers and consumers, she added, but stopped short of endorsing Ottawa's countermeasures.

Europe's calculation: accommodate first, push back later

The hesitation is not accidental. Since Donald Trump returned to the White House, EU institutions and member states have pursued a strategy of containment. They negotiated a trade truce that the European Parliament criticised as one-sided, only strengthening its guardrails after Trump threatened to seize Greenland. Tom Wright of the Brookings Institution, a former senior director at the U.S. National Security Council, put it bluntly: Europe will defend its own interests when forced, but it is also trying to accommodate Trump because it still needs America. Coordinating a collective pushback against Washington would feel like a significant escalation.

Germany exemplifies the dilemma. Chancellor Friedrich Merz spoke privately with Carney on Monday, but Berlin has not broken ranks publicly. The German export model depends on access to the U.S. market, and the memory of the first Trump term's steel and aluminium tariffs remains fresh. French President Emmanuel Macron has been similarly cautious. The EU's collective instinct is to avoid becoming the next target.

Britain's separate peace

The United Kingdom faces its own constraints. Both the U.S. and Canada rank among Britain's top trade and investment partners, according to William Bain of the British Chambers of Commerce. London values the Economic Prosperity Deal struck with the Trump administration last year, which halved American steel tariffs and lowered automotive duties. The BCC also wants the U.K.-U.S. Technology Prosperity Deal implemented in full after parts were frozen in 2025. Meanwhile, Prime Minister Andy Burnham's government has signalled openness to discussing U.S. concerns about the Digital Services Tax that hits American tech firms. Bain noted there are no winners from escalation, a sentiment that effectively rules out British participation in any coordinated response.

What Canada refused to concede

The immediate trigger for the latest escalation was not a traditional trade irritant. Washington demanded concessions on Canada's French-language and cultural protections, which are constitutionally entrenched, and sought restrictions on Ottawa's ability to negotiate trade agreements with third countries. Carney walked away, arguing the deal threatened Canadian sovereignty. The parallel is striking: Brussels has faced similar U.S. pressure to dilute its green and digital rulebooks over the summer, and the Commission insists those frameworks are not negotiable. If Carney's resistance holds, it could strengthen the EU's hand in its own negotiations.

There is also a tactical calculation. The U.S. Supreme Court has struck down Trump's original tariff authority, and the November midterm elections could weaken his congressional position. Ignacio García Bercero, the Commission's former top official on U.S. trade, suggested Ottawa judged that reaching a deal now was unwise and that firmness might yield better terms after the midterms.

The hollowing out of middle power diplomacy

Keith Rockwell, a former WTO spokesperson now at the Hinrich Foundation, captured the structural problem. The middle powers tend to be the ones most committed to the multilateral trading system, he said, but without the U.S. and China it's going to have a hollow ring. For the moment, we have to be patient. That patience is being tested in real time. The CPTPP-EU dialogue continues at a glacial pace. The European Parliament's trade committee has pushed for faster movement, but the Council and Commission control the negotiating mandate.

Carney has responded by doubling down on Europe. This fall we will begin intense discussions with the European Union, the world's second-largest economy, to build a much stronger and deeper economic and security partnership, he said on Monday. We can build such unparalleled access, because we can be trusted. An EU-Canada summit at the end of October will be the first concrete milestone. London and Ottawa are also working toward a new strategic partnership this year, though the UK government's language emphasises deepening ties through existing CPTPP channels and the Economic and Trade Working Group.