← NewsAll
Canada faces highest risk in relations with the U.S., Eurasia Group says
Summary
Eurasia Group reports that Canada is the country most at risk from U.S. political turmoil in 2026, citing trade uncertainty and recent U.S. tariffs; the report notes a USMCA review this year and that Prime Minister Carney will meet President Xi Jinping next week.
Content
An Eurasia Group report says Canada stands to face the largest fallout from political turmoil in the United States in 2026. The firm describes the long-standing Canada–U.S. relationship as changed and says trade uncertainty will affect the Canadian economy. The report cites U.S. tariffs imposed since 2024 on steel, aluminum, automotive and lumber sectors. It also notes connections between Eurasia Group and people linked to the prime minister's circle.
Key points:
- The report identifies Canada as the country most at risk from U.S. political instability in 2026.
- It reports that recent U.S. policy moves have included tariffs on steel, aluminum, autos and lumber that affect Canadian sectors.
- The report warns Canada’s efforts to diversify trade will face "powerful headwinds" and describes the USMCA review this year as likely to become a "Zombie USMCA"—neither fully renegotiated nor terminated.
- It flags security concerns including a warning about possible Russian "hybrid attacks" on Canadian Forces and risks tied to NATO–Russia tensions.
- The report says cheaper Chinese-made goods from a weakened Chinese economy could challenge Canada’s auto sector and complicate relations with the U.S.
- It notes that Prime Minister Mark Carney is scheduled to meet President Xi Jinping in Beijing next week.
Summary:
The Eurasia Group characterizes actions in Washington as reshaping Canada–U.S. relations and increasing trade and geopolitical uncertainty for Canada. The report anticipates a difficult environment for trade diversification and a likely unresolved USMCA review this year, while diplomatic engagement continues with a planned meeting between Prime Minister Carney and President Xi Jinping next week.
