After further escalating his trade war Wednesday, U.S. President Donald Trump said if Canada becomes the first associate member of the European Union it could be a “hostile act.”
Speaking to reporters in North Carolina, the president said if it’s done with “bad intentions” he will “put very heavy tariffs on Europe.”
Trump also called Canada a “terrible trade partner” after earlier Wednesday signing a memorandum directing federal agencies overseeing government procurement in the United States to remove all products of Canadian origin.
“President Trump is taking action to hold Canada accountable for its continued unreasonable and discriminatory treatment of U.S. goods, which has burdened and disadvantaged hard-working Americans,” said a fact sheet from the White House.
A White House official, speaking on background, said that order was not related to the European Union forging closer ties with Canada.
Earlier in the day, Prime Minister Mark Carney listened in the front row of the state of the European Union address as European Commission President Ursula von der Leyen laid out the case for the closer relationship.
She said the two sides must “urgently reimagine” their partnership and move beyond a free-trade agreement to bring the relationship to the “highest level possible.”
Carney is set to address the European Parliament on Thursday. Officials have said the two sides are still talking about how to define an enhanced partnership.
Canada-U.S. relations were upended as Trump returned to the White House last year armed with ever-changing tariffs targeting America’s northern neighbour. But Trump’s trade war has ramped up in recent weeks after negotiations between the two countries broke down.
Carney has warned that Canada’s pivot away from the United States will come at a cost, but the alternative would be far worse.
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To justify Trump’s latest move, the presidential order points to Ottawa’s “Buy Canadian” policy, which was launched, along with similar actions by some provinces, after the president hit Canada with tariffs and threats of annexation.
The order said Canada has “unreasonably imposed new barriers to United States companies seeking to access the Canadian government procurement market.”
“My administration will always act to combat such unreasonable or discriminatory practices,” the order said.
The order also said the United States Trade Representative will monitor for circumstances that may require the “need for further action.” It said the department will also inform the president if goods can be returned following “a change in policy by the Canadian government that would end the current treatment toward United States origin items.”
It was not immediately clear what would be affected by the procurement policy. Trump’s order said the move would affect access to goods the United States agreed to cover at the federal level under the World Trade Organization Agreement on Government Procurement, amounting to over $280 billion annually.
Canada-U.S. Trade Minister Dominic LeBlanc’s office said they have taken note of the procurement restrictions. Spokesperson Gabriel Brunet said “we will review these measures with a focus on the best interest of Canadian businesses and workers.”
Trump first threatened to remove all Canadian-origin products from federal procurement in a post on social media last week.
“That is not reciprocity, it is a Canadian Trade Scam,” Trump’s post said of the Buy Canadian rules.
The Buy Canadian policy, implemented in December 2025, prioritizes Canadian companies in large federal purchases, requires the use of Canadian steel, aluminum and wood in major federal construction and defence projects, and restricts non-defence contracts to Canadian companies or international firms from countries which offer the same access to Canadian businesses.
The United States also has a “Buy America” policy that prioritizes domestic purchasing in key sectors. Former Democrat president Joe Biden implemented an array of protectionist procurement rules that Trump has since kept in place or expanded.
Trump initially hit Canada with economywide tariffs citing the flow of fentanyl last year. While those duties were squashed by the U.S. Supreme Court, the Trump administration replaced the tariff wall with a 10 per cent levy linked to forced labour in supply chains.
Those tariffs do not apply to goods compliant with the Canada-U.S.-Mexico Agreement on trade.
Trump is also slamming Canada with separate sectoral tariffs on industries like steel, aluminum, automobiles and cabinetry.
Last month the Trump administration intensified the tariff spat by hitting an array of Canadian products, from hockey sticks to honey, with 50 per cent tariffs.
Ottawa’s retaliatory tariffs on specific American goods went into place Sept. 8. The same day, Trump signed executive orders to completely bar imports of certain Canadian goods, including motorcycles, some dairy products and alcoholic beverages, later this month.
The trade war between former close allies has caused major concerns for businesses in the deeply integrated North American market.
The Associated Equipment Distributors on Tuesday sent letters to U.S. governors from states with significant exposure to Canadian trade calling for a resolution.
“Our supply chains do not stop at state lines or national borders. Heavy machinery, agricultural equipment, industrial components, and service parts routinely cross the U.S.-Canada border multiple times during production and distribution,” President and CEO Brian P. McGuire wrote in the letter.
“The ongoing uncertainty created by trade disputes will disrupt significant multi-year capital investments, inflate equipment costs, and directly threaten local jobs.”
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