From tariff tantrums
to rules–based trade
Canada’s unique trade position bridges Europe, the Pacific and North America’s manufacturing heartland
February 17, 2026 • Editorial
Amid Donald Trump’s latest tariff theatrics, it is easy for Canadians to stare south and miss the bigger story taking shape over the horizon. While Washington turns trade into televised grievance, a quieter project is taking form between Brussels, Tokyo, Ottawa and a dozen other capitals: an emerging economic space linking the European Union and the Trans‑Pacific bloc known as the CPTPP, with Canada’s Prime Minister Mark Carney playing a pivotal, if not solitary, role.
While Washington turns trade into televised grievance, a quieter project is taking form between Brussels, Tokyo, Ottawa and a dozen other capitals
On one channel, tariffs are deployed as political theatre. On another, largely overlooked channel, trade and foreign ministers are designing what could evolve into a mega‑market encompassing roughly 40 per cent of global GDP, binding supply chains from Quebec through Osaka to Frankfurt. The wager is stark. If the United States persists in weaponizing access to its market, middle powers will construct an alternative web of rules and routes so they are no longer at the mercy of the shifting mood of the Oval Office.
The starting point is concrete rather than speculative. The European Union and the members of the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership have already established a formal Trade and Investment Dialogue. The label may be technocratic, but the ambition is not. Instead of a single, dramatic treaty, this is a step‑by‑step effort to align standards, facilitate investment flows and reinforce supply chains between two blocs that are already deeply intertwined. Most CPTPP economies have free trade agreements with the EU, and Canada alone is simultaneously embedded in CETA with Europe, CPTPP across the Pacific, and CUSMA in North America. Taken together, these facts explain why this emerging architecture matters far more than the latest social media tariff outburst.
Integrated supply chains can seem like specialist jargon, but the reality is very concrete. It concerns where car parts are stamped, where phone chips are designed, and where the minerals for a future EV battery are mined and processed. Picture a block of Quebec graphite or lithium shipped to a Japanese plant for processing, then into batteries assembled in a Polish factory, then into vehicles sold across Europe and, under favourable rules of origin, back into North America. The more the EU and CPTPP align rules and recognize one another’s standards, the easier it becomes for companies to move value along that chain without being obstructed by tariffs or regulatory barriers.
In such a system, tariffs lose much of their force as a blunt instrument and become obstacles to be worked around. If Washington imposes a new duty on a given category of imports, producers embedded in an EU–CPTPP network can re‑route production, re‑label origin and re‑deploy investment. None of this renders the United States irrelevant; its market remains too large and too central for that. But it does reduce its capacity to coerce partners through trade as those partners develop credible alternatives. For countries like Canada, now accustomed to managing the sensitivities of an unpredictable neighbour, that is a very tangible advantage.
‘Most CPTPP economies have free trade agreements with the EU, and Canada alone is embedded simultaneously in CETA with Europe, CPTPP across the Pacific and CUSMA in North America.’
Mark Carney fits naturally into this picture. For years, he advised others on managing their economies, from the Bank of Canada and the Bank of England to the World Economic Forum in Davos. His themes were consistent: the fragility of global finance, the need to price climate risk, and the vulnerabilities created by stranded assets and brittle supply chains. As prime minister, he has not discarded that analysis; he has translated it into a governing agenda. A Carney‑led Canada is one that sees itself as an autonomous junction in a wider system rather than a subordinate appendage to a dominant power.
Structurally, Canada is well placed to play that role. It is one of the few economies with deep, modern trade agreements spanning Europe, the Pacific and North America. It has the critical minerals and energy that allies want, the financial and legal infrastructure global investors trust and the political stability that looks increasingly rare. The Carney government presents this less as a response to unpredictable American tariffs than as a national project: cut domestic barriers, accelerate infrastructure and permitting, and connect Canada to a denser grid of like‑minded economies so that volatility in any one capital hurts less.
There is, to be clear, a fair amount of projection in the idea that Carney is leading this emerging mega‑bloc. The EU–CPTPP process is driven by many hands, most of them unelected technocrats who spend their lives in windowless meeting rooms. Resistance to deeper liberalization runs through Europe and Asia, just as it does here. No one has signed up for a shiny new super‑bloc with a flag and an anthem. What actually exists is an intent: to lock in supply‑chain resilience, common digital rules and mutual investment protections among economies that still, on balance, prefer a rules‑based order to a world of naked power.
And then there is the Canadian reality check. For all the talk of hubs and junctions, we live in a country where it can take a decade to secure permits for a mine, a pipeline, or even a large housing project. Interprovincial barriers undermine the very efficiencies our international agreements are supposed to magnify. Voters are understandably suspicious when elites promise that the next round of globalization will finally deliver for them, after years of wage stagnation, soaring housing costs and decaying public services. A Carney doctrine that looks brilliant in Geneva will quickly collapse if it cannot deliver tangible benefits in Granby or Saskatoon.
‘Mark Carney fits naturally into this picture. For years, he was the Canadian export advising others on how to manage their economies, from the Bank of Canada and the Bank of England to the stages of Davos.’
That is the central risk in this endeavour. We may speak as if Canada is a pivotal actor while continuing to operate as if it were peripheral. We may issue communiqués on critical minerals and defence‑industrial corridors while our infrastructure strains under outdated capacity. We may promote Canada as a trusted partner in global supply chains while investors still face dense, unpredictable regulatory obstacles. If we intend to benefit from an EU–CPTPP‑style economic space, we will have to do something Canadians have not done in a long time: act with urgency at home.
Which brings us back to Trump’s tariffs. They make for good television because their victims and villains are easy to cast. The work of building alternative rules and alliances is dull by comparison. There are no rallies for improved mutual recognition of standards, no slogans for investment protection clauses. Yet over the next decade, that is where our prosperity will be decided. Either we help design a trading system that makes tantrums matter less, or we spend another generation reacting to the latest threat from Washington.
Canadians are not condemned to be spectators in this drama. We are, by historical accident and institutional design, embedded in almost every piece of the emerging puzzle: Europe’s single market, the Pacific’s high‑standard partnership, North America’s integrated manufacturing base. Canada can use that position to shape a more resilient order—or squander it by clinging to old habits and old fears. The question is not whether a mega‑bloc will be announced with fanfare; it is whether, when the new lattice of deals quietly clicks into place, Canada will have done the hard domestic work needed to deserve its seat at the junction.
Feature image: Michael Petersen – Pexels
