From Top Electric.

In early 2025, Ontario, Canada, sent shockwaves through North American trade by signing a $20 billion deal with Volkswagen for a St. Thomas gigafactory, producing electric vehicle batteries exclusively for Europe. This deliberate pivot away from the U.S. market signals a profound betrayal, sparked by the Trump administration’s 50% tariffs on Canadian steel and aluminum. Once inseparable economic allies, Canada and the U.S. shared integrated supply chains, with Ontario’s manufacturing fueling Detroit’s auto industry. But these tariffs shattered trust, prompting Canada to realign with Europe. The gigafactory, powered by Ontario’s clean energy grid, will create 3,000 jobs and power a million European cars annually, bypassing the U.S. entirely. This move is more than economic—it’s a declaration of strategic autonomy. Ontario tested its leverage with a temporary surcharge on electricity exports, exposing U.S. vulnerabilities to blackouts in states like Michigan and New York. Meanwhile, Canadian pension funds are redirecting billions to EU-tied projects, and raw materials like nickel and cobalt now flow east. Defense contracts are shifting toward European partners, and Prime Minister Mark Carney’s diplomatic overtures in Paris underscore this realignment. Ontario’s innovation corridor now adheres to EU standards, not U.S. regulations. This quiet decoupling—contract by contract, shipment by shipment—marks a permanent shift. The U.S., once Canada’s default partner, is now just an option, its dominance eroded by its own policies. Ontario’s new economic map places Europe at its center, leaving Washington to grapple with the consequences.

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