A fact-based response to Michael Taube’s “Carney’s EU mistake is nearly complete”
Michael Taube makes a compelling point in his recent National Post column: the European Union cannot replace the United States as Canada’s principal trading partner.
He is right.
But there is a problem with using that fact to declare Mark Carney’s European strategy a mistake.
The federal government’s stated policy is not to replace the United States with Europe. It is to reduce Canada’s dependence on a single market by increasing trade with countries outside the United States.
Those are very different propositions.
First, give Taube credit where he is right
Canada’s economic relationship with the United States is enormous.
Statistics Canada reports that 71.7 per cent of Canadian merchandise exports went to the United States in 2025.
That was down from 75.9 per cent in 2024, but it still demonstrates just how deeply Canada remains tied to the American market.
Geography matters. So do integrated automotive and manufacturing supply chains, pipelines, railways, highways, electricity networks and decades of cross-border investment.
Europe cannot simply duplicate those advantages.
So if somebody were proposing that Canada replace the United States with Europe, Taube would have a very strong argument against it.
But that brings us to the central problem.
Who is actually proposing that?
The Carney government has established a target of doubling Canada’s non-U.S. exports over the next decade.
Not replacing U.S. exports.
Not ending the Canada-U.S. economic relationship.
Not shifting all that trade to Europe.
Doubling exports to the rest of the world.
And the government’s trade policy identifies Europe and the Indo-Pacific, along with other international markets, as part of that diversification effort.
That distinction changes the debate considerably.
The question is no longer:
Can Europe replace America?
Clearly, it cannot.
The relevant question becomes:
Can Canada sell substantially more goods and services outside the United States while maintaining a major economic relationship with the Americans?
On that question, we already have some evidence.
Diversification is actually showing up in the numbers
In 2025, Canadian merchandise exports to the United States declined 5.8 per cent.
At the same time, exports to countries outside the United States increased 17.2 per cent.
That increase was large enough to offset most of the decline in U.S.-bound goods exports.
Those numbers do not prove Carney’s long-term strategy will succeed.
One year of trade data cannot establish that.
But they do establish something important:
Canada is capable of increasing exports to non-U.S. markets.
That makes the argument that Canada has little realistic opportunity to diversify much harder to sustain.
Europe is already a major Canadian market
There is another important piece of context.
The European Union is already Canada’s second-largest trading partner in goods and services.
Combined Canada-EU trade in goods and services reached $178.6 billion in 2025.
And this relationship has been growing.
According to the federal government, bilateral merchandise trade between Canada and the EU increased by more than 77 per cent between 2016 and 2025.
Again, none of this makes Europe a replacement for the United States.
It doesn’t need to be one.
Increasing Canadian exports to an existing
trading relationship can still reduce Canada’s exposure to disruptions in its largest market.
What about CETA?
Taube raises another reasonable question.
Canada already has the Comprehensive Economic and Trade Agreement with the European Union. If most tariffs have already been eliminated, how much more can Canada realistically gain?
That’s a fair challenge.
But Canada’s developing relationship with Europe is no longer limited to lowering conventional tariffs.
Canada and Europe are expanding cooperation in areas including defence, energy, technology, critical minerals, investment and supply chains.
Canada has also become the first non-European country to participate in the European Union’s SAFE defence initiative, opening European procurement opportunities to Canadian defence companies.
Whether Canadian businesses successfully capitalize on those opportunities remains to be seen.
But those opportunities exist independently of the tariffs already eliminated through CETA.
Where Taube’s argument becomes less certain
Taube’s column suggests that Carney’s increasingly close relationship with Europe represents an attempt to move Canada away from the United States.
There is certainly evidence that Carney wants Canada to become less economically dependent on the United States.
The government’s own diversification target establishes that.
But becoming less dependent on one customer is not the same as abandoning that customer or replacing it with another.
Canada can pursue greater trade with Europe, Asia and other markets while continuing to conduct enormous amounts of business with the United States.
Those policies are not mutually exclusive.
And there are legitimate questions for Carney
A rebuttal shouldn’t pretend the government’s strategy is guaranteed to work.
It isn’t.
Moving Canadian goods to distant markets costs money.
Much of Canada’s existing transportation and energy infrastructure was designed around north-south trade with the United States.
European regulations and non-tariff barriers can still make market access difficult.
And Canadian companies must actually use the trade agreements and opportunities governments negotiate.
Carney’s target of doubling non-U.S. exports over a decade is ambitious.
Whether Canada achieves it should be judged by trade volumes, investment, new customers and actual economic results — not government announcements.
Those are legitimate grounds on which to challenge the policy.
But let’s argue about the policy Canada actually has
Michael Taube is right about something Canadians should not ignore.
The United States cannot realistically be replaced as Canada’s dominant trading partner in the foreseeable future.
Our geography alone makes the relationship unique.
But that does not establish that expanding Canadian trade with Europe is a mistake.
And it does not establish that Carney is attempting to replace the United States with the European Union.
The government’s stated objective is considerably more modest — and more measurable:
Keep trading with America while selling substantially more Canadian goods and services everywhere else.
We don’t yet know whether Carney will achieve that goal.
We do know that Canadian exports to non-U.S. markets increased 17.2 per cent last year.
We know the EU is already Canada’s second-largest trading partner.
And we know Canada’s government has set a specific target of doubling non-U.S. exports over ten years.
Those are facts.
So perhaps the real debate shouldn’t be whether Europe can replace America.
It can’t.
The better question is whether a country that sends more than seven out of every ten dollars of its merchandise exports to one market should work seriously to develop more customers.
That is the policy worth debating.
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