By The Epoch Times | Created at 2026-09-21 22:32:10 | Updated at 2026-09-21 23:22:14
1 hour ago
Although the United States and Canada have different responses to Brussels’s suggestion that Canada become a European Union (EU) associate member as part of efforts to reduce supply chain dependence on China, analysts said the three parties can still cooperate on that goal regardless of the proposal’s outcome.
European Commission President Ursula von der Leyen stated on Sept. 16—when delivering her annual State of the European Union address to the European Parliament in Strasbourg, France—that the EU would use “all available tools” to reduce its trade deficit and rebalance economic relationship with Beijing, including deepening cooperation with Canada by inviting it to be the bloc’s first associate member to reduce raw materials’ reliance on communist China.
Canadian Prime Minister Mark Carney on Sept. 17 welcomed the EU’s invitation to make Ottawa an associate member of the 27-nation bloc and said Canadian lawmakers would ultimately vote on the final structure of the grouping.
Carney’s comments came shortly after U.S. President Donald Trump criticized the EU proposal, questioning the intention behind it.
Trump said on Sept. 16 that the United States would impose “serious tariffs” on the EU if he considers the plan “a hostile act” and could even “stop trading with Europe on many things” if Brussels moves ahead with it.
“If it’s a good intention, that’s fine. If it’s a bad intention, we'll put very heavy tariffs on Europe,” he told reporters en route to an event in North Carolina.
Trade relations between the United States and Canada have been tense, with the Trump administration recently increasing tariffs on Canadian goods, prompting Ottawa to respond with levies of its own.
Carney has pledged to impose reciprocal tariffs on U.S. goods dollar for dollar.
Von der Leyen also highlighted the EU’s reliance on China for many critical minerals, notably rare earths, in her speech to the EU parliament.
She said that Europe needs to maintain greater independent capabilities in areas such as energy, raw materials and clean technology. The EU is also preparing to further deepen its relationship with Canada to reduce its dependence on Chinese raw materials.
Canada holds over 15.2 million tonnes of rare earth oxide reserves, ranking among the largest resources globally.
This forms the critical economic-security backdrop for the EU’s recent efforts to actively strengthen ties with Canada, Sun Kuo-hsiang, a professor of international affairs and business at Nanhua University in Taiwan, told The Epoch Times.
In the short to medium term, while the EU can reduce risk, it is difficult to truly decouple from China, he said.
“This is because the constraints lie not merely in mineral deposits, but—more significantly—in processing stages such as separation and refining, battery materials, rare earths, and magnets.”
China’s advantage lies not merely in the volume of its mineral reserves, but in its control over the entire industrial value chain—spanning ore procurement, smelting, separation, and refining to materials processing and the manufacturing of magnetic materials, batteries, and components, Davy J. Wong, U.S.-based independent political economist, told The Epoch Times.
“Even when ores are mined elsewhere, they must ultimately be shipped to China for processing to become industrial materials ready for direct use by European industries in sectors such as automotive, electronics, defense, and new energy,” Wong said.
“So in the short term, the EU can only reduce its reliance on China, but it cannot completely replace it.”
Therefore, the United States, Canada, Australia, Latin America, Africa, Japan, and South Korea should all serve as distinct nodes within the supply chain, he said.
“What Europe aims to establish is a diversified supply system, rather than simply seeking another single country to fully replace China,” Wong said.
The second path—and one to which Europe currently needs to pay greater attention—is to fully leverage its own industrial and technological strengths to establish a capacity for reciprocal leverage vis-à-vis China, Wong said.
Canada–US–EU Relations Amid Concerns About China
The Carney administration’s willingness to move closer to the EU does not mean Canada will completely abandon the United States or sever ties with Beijing, Wong said of Carney’s response to the EU invitation.
Canada is deeply integrated with the United States across geography, finance, manufacturing, defense, and intelligence networks, Wong noted, and “Europe cannot replace the United States in the short term.”
“What Carney is likely pursuing is a strategic balancing act among the United States, China, and the EU, leveraging ties with Europe to strengthen Canada’s negotiating position with Washington,” he said.
Canadian Prime Minister Mark Carney speaks at a press conference in Ottawa, Canada, on Aug. 22, 2026. Dave Chan/AFP via Getty Images
“Carney also stressed that Canada still abides by the U.S.-Mexico-Canada Agreement and has no intention of signing a free trade agreement with China,” Sun noted.
The EU can leverage Canada’s desire to diversify and hedge risks to draw the country closer to Europe in areas such as security, technology, and critical minerals, Sun said.
Canada’s current economic situation is far from ideal, compounded by various tariff and trade disputes, Cheng Chin-mo, associate professor of diplomacy and international relations at Tamkang University in Taiwan, noted.
“The country’s left-leaning prime minister has pinned high hopes on cooperation with the Chinese regime—a strategy that is essentially heading in the wrong direction,” he told The Epoch Times.
Canada’s aim is to expand the number of international partners rather than relying solely on the United States as in the past, Cheng said.
If the EU chooses to deepen cooperation with Canada, it’s still possible that the EU, the United States, and Canada could coordinate their stance regarding the Chinese regime—specifically in terms of curbing China’s industrial overcapacity and dumping practices, or countering its infiltration in the high-tech sector, Cheng said.
The United States faces a dilemma, Sun said.
“From the perspective of containing China, it should welcome Canada supplying minerals to Europe. Yet, from an ‘America First’ standpoint, it is reluctant to see Canada and the EU form an autonomous bloc that bypasses the United States and collectively resists American economic pressure,” he said.
The more likely scenario is one where the United States, Canada, and Europe cooperate on critical minerals and technological security while competing over tariffs, industrial subsidies, and market interests—all while Canada and the EU maintain room to conduct business with China, Sun said.
The success of this arrangement between the EU and Canada hinges not on the label of “associate member,” Wong said, but on whether the EU can truly grasp the three-layered dynamic within Canada: overt commercial interests involving China; the political-economic collusion involving Beijing’s power elites; and the United Front and intelligence networks operated by Beijing’s state apparatus.
The United States would welcome EU-Canada cooperation if it succeeded in establishing supply chains for critical minerals, defense, and high-tech sectors that are free from Beijing’s control, Wong said.
“However, the United States would certainly object if Canada were to use the EU market to circumvent U.S. tariffs, or if it continued to allow Beijing-linked capital to control critical resources while simultaneously participating in European security frameworks.”
Wong suggested that the United States, Canada, and the EU could join forces on critical minerals, the defense industry, semiconductors, data security, and investment screening.
“But they are unlikely to form a comprehensive, conflict-free economic alliance against China. While the three parties need to collectively guard against Beijing’s economic expansion, they will also compete with one another for industries, capital, and jobs,” he said.
EU Trade Tools to Contain China
Von der Leyen noted that the EU’s trade deficit with China averaged €1 billion per day last year, an imbalance that has reached a “tipping point,” with Europe bearing the brunt of a “China Shock 2.0” driven by deindustrialization, and vowed to use all tools to balance trade with China.
Von der Leyen didn’t say what measures were on the table.
The three analysts believe that under the EU’s current framework, all the trade tools mentioned by Von der Leyen would encompass anti-dumping and anti-subsidy duties, the Carbon Border Adjustment Mechanism, foreign subsidy reviews, restrictions on public procurement, and reviews of foreign acquisitions, as well as the activation of the anti-coercion instrument in specific circumstances.
The EU can also raise standards regarding product safety, environmental protection, data security, and supply chain traceability, they said.
While these measures can protect specific industries and compel companies to diversify their supply chains, they may not necessarily significantly narrow the trade deficit, Sun said.
“This is because the deficit also stems from the lack of competitiveness in European manufacturing, high energy costs, and a reliance on Chinese intermediate goods and rare earths.”
Furthermore, the analysts warned that restricting imports from China could lead to increased imports of Chinese goods from third countries.
A worker inspects a vehicle's charging system in Hefei, China, on Jan. 17, 2025. Kevin Frayer/Getty Images
“Chinese companies can relocate part of their production capacity to Southeast Asia or Turkey, or establish factories in EU countries—such as Hungary or Spain—that are keen to attract Chinese investment, subsequently entering the European market with goods produced or partially processed locally,” Wong said.
However, the tools Von der Leyen refers to consist only of those visible to the EU based on its understanding of how things work in communist China, Wong said, and they do not constitute a comprehensive set of countermeasures devised with a true grasp of China’s economic system.
“This is because the EU currently focuses primarily on nominal tariffs, export prices, and government subsidies regarding Chinese goods, without accurately calculating the actual, aggregate burden European products face when entering the Chinese market,” he said.
Therefore, what China and the EU truly need to establish is not merely “reciprocal tariffs,” but a framework of “reciprocal tax burdens and market access standards,” Wong said.
Von der Leyen also described the European Union as currently facing “an openly hostile world,” calling for unity among member states as a crucial way to address external challenges.
Although the EU has realized it, the problem the bloc has is that it has never been able to make a unified decision, Cheng said.
“Germany, for its part—particularly due to the investments major companies like Volkswagen have made in China—has resisted taking action,” he said.
Wong said of the obstacles to reaching consensus among EU members: “Although common trade regulations apply within the EU, member states differ in their industrial interests and political judgments.
“Furthermore, China does not necessarily accept the methodologies the EU employs to calculate costs, subsidies, and industrial injury.”
Sun said he believed that approaches at the political level might prove more effective.
The key lies not merely in buying fewer Chinese goods, Sun said, but in raising the external costs for Beijing should it fail to adjust its economic model, while strengthening Europe’s own capacity for substitution.
Luo Ya and Reuters contributed to this report.
