U.S. unpredictability on tariffs, trade and security has destabilized the geopolitical environment, with middle powers caught between vulnerability and caution. 

CUSMA does not expire until Canada Day, 2036 and the sweeping U.S. Liberation Day tariffs were struck down. But within a year the U.S. could deploy more targeted, disruptive tariffs based on other authorities, and Canada remains disproportionately vulnerable. 

While Canada once turned to rules-based multilateralism for collective strength, those rules no longer appear capable of constraining major powers, given the leverage they have openly demonstrated. No one should expect that major powers will voluntarily relinquish that leverage. 

At the European Political Community summit in May, Prime Minister Mark Carney signalled that the rules-based order can be “rebuilt”. A full rebuild, however, may not be necessary. A strategic reset may be more feasible, with one new agreement, where Canada is well-positioned to lead. 

Washington recently threatened the EU with increased vehicle tariffs, as well as Greenland annexation and the earlier Liberation Day tariff threats. In response, French President Emmanuel Macron and others called for the EU to deploy its Anti-Coercion Instrument (ACI), or “trade bazooka”. Business leaders have also called for a UK equivalent.

But with the U.S. remaining both the world’s largest economy and NATO’s primary security guarantor, the EU has been cautious as it navigates geopolitical pressures spanning Ukraine, Iran, and Taiwan.

Canada and the Ottawa Group

Canada also has a long institutional history of helping design rules-based international mechanisms. Canadian officials helped shape WTO dispute settlement and pioneer independent review of trade remedies under NAFTA.

During G7 and G20 processes Canada often acts as a consensus builder, including in the G20 which followed the 2008 financial crisis, and more recently with the 2018 WTO Ottawa Group. 

Canada should consider proposing a multilateral version of the ACI, a Multilateral Anti-Coercion Agreement (MACA) the Ottawa Group as a model. The Ottawa Group covers 40 states (counting each EU member), including the U.K., Japan, South Korea and China. When WTO reform stalled, the Ottawa Group preserved dispute settlement among members. 

Even without China, this group possesses substantial collective leverage. The U.S. receives approximately two out of three of Canada’s goods exports, which means Canada is acutely vulnerable to U.S. tariffs. Canada and the Ottawa Group both run a trade surplus with the U.S., yet the U.S. is relatively more tariff-exposed to the Ottawa Group even without China. These dynamics do not capture additional complexities such as sanctions volatility, energy dependence, or critical input dependencies, but they nonetheless provide a useful high-level gauge of relative tariff leverage.

A key objective should be to stabilize relations with the U.S, by focusing on mutual gain rather than on a zero-sum game, building on Mr. Carney’s recent speech to the........

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