Canada faces heightened risk in U.S. relations, Eurasia Group says

Eurasia Group warns Canada could be the country most affected by U.S. political turmoil in 2026, noting recent U.S. tariffs on steel, aluminum, automotive and lumber and saying trade uncertainty may affect the Canadian economy.

A report from the Eurasia Group warns that no other country will be as profoundly affected by political turmoil in the United States as Canada in 2026. The firm says the long-standing Canada–U.S. relationship has changed and that ongoing trade uncertainty will affect the Canadian economy. The report notes Canada relied on deep ties to the United States for decades. It says Canada will need to manage its relations with the U.S. while building new partnerships, but expects powerful headwinds for diversification. Key points: - Eurasia Group warns Canada is likely to be the most affected country by U.S. political turmoil in 2026. - The report says the long-standing bilateral relationship has changed and that trade uncertainty will impact the Canadian economy. - It notes that U.S. actions since 2024 include multiple tariffs on Canada, affecting steel, aluminum, automotive and lumber sectors. - The firm says Canada’s efforts to diversify trade and build new relationships will face powerful headwinds, and that Canadian companies and investors could be affected. Summary: The report projects economic and trade disruption for Canada in 2026 as a result of changed U.S. policy and tariffs. Undetermined at this time.