Canada shows Europe how to neutralize Trump’s trade attacks

The Ottawa government’s latest reforms are a model for victims of Washington’s trade war around the world.

Speeches by heads of government are rarely worth reading, but the Canadian Prime Minister’s Mark Carney at the Council on Foreign Relations on September 22 is an exception to this rule.

According to , Carney makes a blunt diagnosis: for an open and democratic economy like Canada’s, the end of world order rules-based approach and the resulting trade challenges from both the United States and China pose existential threats.

Not all is lost, however. As Carney says, countries can still “continue moving forward — with what they can control“.

Focus in areas where Canada maintains some room for maneuver is precisely the objective of many of the reforms that Ottawa has been adopting recently.

For other open and developed economies, such as those in the European Union, these policies constitute a model for a sensible answer to current economic challenges.

These policies include the export support through the deepening of the internal market, redouble efforts in new trade agreements free and the taking advantage of existing assets — that allow these economies to become suppliers of critical goods to allied countries with similar ideas.

At a time when US customs tariffs are grabbing the headlines, the first priority for developed economies is to help exporters which appear destined to lose market share in the United States.

But looking inward is often a good first stepsays Foreign Policy. If doing business abroad is becoming more complicated, then perhaps reinforce internal sales can help.

Two statistics illustrate how important such a plan could be for Canada.

First, between June 2023 and October 2024, only 27% of Canadian companies sold goods or services outside your region of origin, which highlights how the country still has some way to go to deepen its internal market.

Secondly, the Canadian exports abroad are worth twice as much of trade between regions.

Canadian companies interested in growing domestically face three types of barriers. The first of these barriers are geographical: long distances and harsh winters.

Secondly, there are prohibitions on inter-regional trade: for example, in many cases, the wine produced in a province cannot be sold directly to others.

The third type of barrier has to do with regulatory discrepancies between provinces: for example, many jurisdictions have their own set of energy efficiency rules for dishwashers.

Impediments to interregional sales have a high price: The International Monetary Fund (IMF) calculates that in 2015, excluding geography, such barriers amounted to a tariff of 21% — about six times Canada’s average tariff on foreign imports. In other words, it is often easier to buy goods from abroad than from another province.

For a long time, discussions about Canada’s interregional trade barriers confined themselves to academic circles.

The North American President’s tariffs Donald Trump, however, they put the issue on the agenda, and encouraged the rapid adoption of the One Canadian Economy Act in June, which aims to remove regulatory and technical barriers to intra-Canadian trade.

The provinces have the greatest authority in this area, but the federal government is not standing still: in June, removed all 53 federal exemptions to the Canadian Free Trade Agreement, eliminating a long list of barriers to free trade between provinces.

Canada’s attempt to remove internal barriers to trade meets recent calls for the EU to deepen its internal market. Like Canada, The EU’s “single market” is anything but that.

The IMF calculates thatoexistence of 27 sets of regulations national, customs rules and tax laws puts the equivalent of a 44% tariff in intra-EU trade in goods.

So, as the European bloc tries to build a response to Trump’s trade attacks, look across the Atlantic for what is happening in Canada it could be a wise move for Brussels.

And instead of being debate every Trump statementEU policymakers might be well advised to ask Canadians for some policy advice, concludes Foreign Policy.