Why Europe must reject Canada’s tack towards China

In early 2026, European capitals briefly caught “Mark Carney fever.” The new Canadian prime minister’s defiant Davos speech and swift Beijing trip – capped by a “cars-for-canola” deal and a fresh strategic partnership – looked like pragmatic statecraft in a fracturing world.Carney lowered tariffs on Chinese electric vehicles to 6.1% (with a modest quota) in exchange for Beijing slashing duties on Canadian canola, seafood, and other farm goods. He called China a “more predictable” partner than Washington. Some in Brussels and Berlin wondered aloud whether Europe should follow suit.They should not. Canada’s approach to China is shaped by two structural realities that simply do not apply to the European Union. Brussels cannot replicate Ottawa’s playbook without sacrificing the very industrial base it now desperately needs to defend. The reality is that Canada sells what China wants – commodities – while Europe makes what China started copying and has become very good at: industrial goods.China needs Canadian energy and raw materials to fuel its factories and feed its people; the relationship is classically complementary. In return, Canada imports manufactured goods without threatening its own industrial heartland, because that heartland largely no longer exists in high-tech manufacturing.Decades of deindustrialisation have left Canada comfortable as an “energy superpower” and agricultural giant. Europe has no such luxury. The EU has moved from a tiny deficit with China before the Covid pandemic to a massive one today, which could well hit $400 billion again in 2025, similar to the peak reached in 2023. The EU’s trade deficit with China stems from the flood of sophisticated machinery, chemicals, vehicles, and precision equipment – exactly what the EU has been selling China and the rest of the world for years.In addition, the EU relies fully on China for its energy transition, importing huge amounts of solar panels, batteries and, increasingly, EVs. Germany’s carmakers face existential pressure; Spain and Italy have lost tens of thousands of jobs in traditional industries. Unlike Canada, Europe cannot simply pivot to exporting more canola and crude. Its comparative advantage – and its strategic necessity – lies in maintaining a broad, high-value manufacturing base. Bargaining away tariffs on Chinese EVs in exchange for market access for European pork or wine is not symmetry; it is surrender.Canada’s model is not good for the UK either, notwithstanding Prime Minister Starmer’s attempts to reach a deal while visiting Beijing last month. While the UK’s service-oriented export model could potentially find some gains in the Chinese market, whether in financial services, legal, consulting, education or creative industries, there are still important barriers for the UK to enjoy the same gains as Canada.Firstly, the UK is also excessively reliant on imports from China, which will only increase in the event of a trade deal which the British administration is seeking. The second – and more unforgivable – reason is Ukraine. China’s decisive enabling of Russia’s war in Ukraine remains crucial for Europe. Beijing has become Moscow’s banker, workshop, and components supplier.Dual-use machine tools, electronics, drone parts, and chemicals flow across the border in volumes, allowing Russia to reconstitute its defence industrial base despite Western sanctions. This is not abstract geopolitics. European and British soldiers, taxpayers, and energy consumers bear the cost every day, while it only resonates distantly for Canada.For these reasons, whatever pragmatic accommodations Canada reaches with Beijing – including any future free-trade agreement – must remain Canadian. Europe and the United Kingdom cannot afford the same transactionalism. Continental Europe’s manufacturing sectors are still substantial enough to be worth defending and the UK will only become more dependent on China if it pushes a deal aimed at exporting services, because it will only come with more imports of key industrial goods and green tech.Even more importantly, European security – both for the EU and the UK – is directly tied to the outcome of the war in Ukraine. De-risking remains the correct European formula to deal with China. This means targeted tariffs and subsidies to preserve strategic industries, diversified supply chains, and unrelenting pressure on China to stop fuelling Russia’s aggression.In sum, Europe’s brief flirtation with Carney-style pragmatism is understandable in an age of American unpredictability. But envy is a poor policy guide. Canada can trade what China needs but Europe cannot. And it has more reasons to see China as a security threat.