EU proposes associate member status for Canada

European Commission

President Ursula von der Leyen calls for EU states

to form a new partnership with Canada and

competition from China in "an openly

hostile world."

US President Donald Trump slams the decision and threatens to

boycott trade and impose tariffs on union members

as trade war between America and Canada continues to intensify.

In her annual State of the Union address to the European Parliament in Strasbourg,

European Commission President Ursula von der Leyen says

the bloc would seek to upgrade its ties with Canada in various areas of trade and security,

and proposes offering the North American country associate member status,

building on their existing CETA free trade agreement.

Canadian Prime Minister Mark Carney who was present at the annual

gathering, receives a standing ovation

from European lawmakers following the announcement.

The move follows recent pressure from US tariffs and talks of making Canada the 51st state,

which have pushed Ottawa seek closer economic and security ties with Europe and reduce its

dependence on the US, the destination of roughly 70% of Canadian exports.

Trump on Wednesday signed memorandum to remove Canadian products from US federal procurement.

Arriving in Gastonia North Carolina to campaign at a midterm rally, US President

Donald Trump calls the alliance a "hostile act" done with "bad intention,"

calling the Canadians "terrible trade partners" while vowing to put heavy tariffs on Europe.

During the same address, von der Leyen says The European Union will

use every possible means to reduce its "unsustainable" trade

deficit with China.

Von der Leyen says the imbalance, with a goods

trade deficit of 1 billion euro a day last year year,

had reached a tipping point and that Europe was already suffering

from the second China shock through deindustrialisation.

She also points to heavy reliance on Chinese exports including rare earth.

China had repeatedly stressed in the past that it is not seeking to pursue

trade surplus and instead sees its trade relations with Europe as mutually beneficial.