The UK’s Import Dependency: A Strategic Opportunity For Canada
In the face of rising economic protectionism from the United States, Canada and the United Kingdom have quietly embarked on a strategic reset. Over the past month, new political leadership on both sides of the Atlantic, Mark Carney in Canada and Keir Starmer in the UK, has accelerated efforts to deepen bilateral trade ties, rekindle negotiations, and insulate their economies from volatility driven by U.S. tariffs and shifting global alliances.
The U.S. Tariff Shock: THE Catalyst for Realignment
Since his return to the White House, President Donald Trump has re-imposed and escalated tariffs on Canadian goods, slapping a 25% levy on most exports and a 50% tariff on steel and aluminum. In retaliation, Canada has imposed reciprocal duties, paused enforcement in some sectors, and announced a loan relief program to support domestic producers.
In a move that highlighted the pressures of diplomacy, Prime Minister Carney also withdrew Canada’s planned digital services tax on U.S. tech companies just days before its rollout. The decision, while controversial at home, was seen as a necessary concession to reopen trade talks with the United States.
The message was clear: Canada cannot rely on the U.S. as its sole economic partner. Diversification, especially toward aligned economies with shared values, has become a strategic imperative.
The Starmer-Carney Connection: Trust, Timing, and Opportunity
Against this backdrop, UK Prime Minister Keir Starmer visited Ottawa in mid-June for high-level talks. The tone was optimistic, the goals ambitious.
Starmer and Carney jointly announced the creation of a Canada-UK Economic and Trade Working Group, tasked with identifying and dismantling non-tariff barriers. The group will report back in six months. The two countries also committed to expanding the existing Trade Continuity Agreement, stalled since 2024, and fast-tracking Canada’s ratification of the UK’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) this fall.
In a subtle but telling development, the two leaders reopened discussions on agricultural trade, specifically longstanding Canadian restrictions on UK beef and cheese exports. With Starmer keen to demonstrate Brexit-era economic wins, and Carney seeking to provide Canadian consumers with more choice amid U.S. import restrictions, agriculture may be the first domino to fall.
Beyond Diplomacy: Where Canadian and UK Companies Can Collaborate
This isn’t just a political story; it’s a business opportunity. The policy reset creates immediate and medium-term openings in several sectors:
1. Advanced Manufacturing & Aerospace
As U.S. tariffs drive up input costs, Canadian manufacturers are exploring alternatives. The UK, with its precision manufacturing base and R&D depth, can partner on integrated supply chains and innovation initiatives. This is particularly promising in aerospace and auto parts, where both countries already have strong capabilities and complementary needs.
2. Critical Minerals & Green Tech
With global pressure to build resilient clean energy supply chains, the UK and Canada can jointly develop standards and co-invest in processing and distribution infrastructure for EV batteries, rare earths, and hydrogen tech. The CPTPP and bilateral alignment will help fast-track approvals and funding.
3. Agriculture & Food Processing
For UK farmers and processors, reduced non-tariff barriers mean fresh access to Canada’s large and stable market. For Canadian retailers, UK goods can diversify inventory and mitigate North American pricing shocks. This extends beyond meat and dairy; think packaged goods, spirits, and even horticulture.
4. Defense Procurement
Both countries have committed to raising their defense budgets, Canada to 2% of GDP, and the UK to 2.5% by 2027. Coordinated procurement, especially in naval systems, cyber, and intelligence infrastructure, offers economies of scale and enhanced interoperability. Canadian and UK defense contractors stand to benefit directly from this convergence.
The Geopolitical Context: Shared Values, Shared Urgency
What makes this moment unique isn’t just the alignment of trade goals, it’s the convergence of political will. Both Carney and Starmer represent center-left governments with a pro-internationalist stance. They share a deep belief in rule-based trade, strategic autonomy, and the importance of reliable partners.
For Canadian businesses wary of U.S. volatility, the UK represents a stable, aligned, and high-value market with accessible legal and financial systems. For UK firms navigating post-Brexit uncertainty, Canada is a gateway to North American markets, and a testbed for deeper global engagement.
This is not about abandoning the U.S., but about building a buffer. And in a time of geopolitical realignment, that may be the most valuable strategy of all.
Partner With Us to Navigate the Shift:
In a world reshaped by tariffs, elections, and new power dynamics, Canada and the UK are rediscovering each other. What began as a defensive reaction to American pressure is now becoming a proactive partnership. If the momentum holds, businesses on both sides of the Atlantic could look back at the summer of 2025 as the inflection point for a new era of transatlantic collaboration.
At Abingdon Group, we help businesses seize moments like this. With deep expertise in transatlantic trade, access to capital markets in both Canada and the UK, and direct relationships with policymakers, we’re uniquely positioned to turn geopolitical shifts into strategic growth opportunities. Whether you’re exploring exports, joint ventures, or acquisitions, our advisory team can help you chart the path forward. Learn more about how we support cross-border expansion at www.abingdongroup.com or contact us at info@abingdongroup.com.