European Commission President Ursula von der Leyen said EU is opening the door for Canada to become the first associate member of the 27-member bloc.
President Donald Trump on Wednesday threatened to impose tariffs on the European Union or halt trade with the bloc entirely if it proceeds with its plan to make Canada its first-ever "associate member."
"I think it's laughable ... Canada has been a terrible trade partner," Trump told reporters after landing in North Carolina. He conditioned his threat on the intention of European leaders, saying that "if I think it's at all a hostile act, I will put very serious tariffs or stop trading with Europe on many things."
Trump's remarks came after European Commission President Ursula von der Leyen said EU was opening the door for Canada to become the first associate member of the 27-member bloc.
Associate membership doesn't currently exist as a formal category under EU treaties, and any such arrangement would need to be created and ratified by member states.
The proposal came as Brussels and Ottawa seek to deepen ties, signaling a significant shift in the EU, which had been lukewarm to Germany's proposal in May for granting an associate membership to Ukraine.
In her annual state of the EU address in Strasbourg, France, the EU chief said the bloc wants to bring the relationship with Canada "to the highest level possible."
Canadian Prime Minister Mark Carney, who attended the address, has said in the past that Ottawa was keen to pursue a "unique security and economic alliance" with Europe, but not a full membership.
Canada has sought to diversify away from the U.S. following months of escalating trade tensions and as bilateral trade talks have collapsed . Trump has slapped a 50% tariff on Canadian goods and plans to ban the country's dairy, alcohol and auto imports later this month, drawing retaliation from Ottawa.
"Washington and Ottawa may find an off-ramp from the current trade war, but Canada will continue to reduce its vulnerability to U.S. economic pressure," said James Lindsay, a senior fellow at Council on Foreign Relations.
Von der Leyen's pitch to Canada includes joint work on manufacturing, integration of defense-industrial bases , a tech alliance, energy, artificial intelligence and cooperation in the Arctic.
Canada is already the only non-European country in the EU's SAFE instrument - an initiative that provides Canadian firms with preferential access to defense procurement - and has a free-trade agreement with the bloc, eliminating tariffs on roughly 99% of goods, though that deal still requires ratification by 10 EU states .
Any fresh U.S. tariffs on the EU would test the trade framework Washington and Brussels struck last year, which set a 15% tariff ceiling on most EU exports to the U.S.
Brussels hasn't said whether it will proceed with the associate-member proposal in the face of Trump's threat. EU member states - several of which were reportedly blindsided by the announcement - are yet to respond to Trump's threat.
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