Canada is more vulnerable than any other country to shifts in relations with the United States, according to a new assessment by Eurasia Group, which cautions that political and policy changes in Washington could carry outsized consequences for Ottawa.
The risk consultancy’s analysis highlights the depth of Canada–U.S. integration, noting that Canada depends heavily on the U.S. market for trade, investment, energy exports, and supply chains. With the two economies tightly interwoven, even modest disruptions in U.S. policy — ranging from tariffs and industrial subsidies to border rules and regulatory changes — can quickly reverberate north of the border.
Eurasia Group points out that Canada sends the majority of its exports to the United States, making it uniquely exposed compared to other U.S. allies that have more diversified trade portfolios. Key sectors such as automotive manufacturing, energy, agriculture, and critical minerals are especially sensitive to shifts in American trade or industrial policy.
Beyond economics, the report underscores political and security risks. Canada’s defence and intelligence cooperation with the U.S., including NORAD and broader NATO commitments, means that changes in Washington’s strategic priorities could directly affect Canadian security planning. The firm also warns that growing polarization in U.S. politics could spill over into bilateral cooperation on climate policy, immigration, and border management.
The analysis comes at a time of heightened uncertainty in U.S. politics, with debates over trade protectionism, election integrity, and foreign policy direction intensifying. Eurasia Group suggests that these internal dynamics could translate into unpredictable policy outcomes, leaving Canada with limited leverage despite its close alliance.
Canadian officials have publicly emphasized the importance of maintaining stable ties with Washington while working to diversify trade toward Europe and the Indo-Pacific. However, Eurasia Group argues that diversification, while necessary, cannot quickly offset the scale of Canada’s dependence on the U.S.
Experts say the report is a reminder that Canada’s greatest strength — its proximity and integration with the world’s largest economy — is also its greatest vulnerability. As U.S. politics grow more volatile, the consultancy warns that Ottawa will need to invest more in economic resilience, diplomatic engagement, and contingency planning to manage the risks inherent in its most important relationship.