A new global risk assessment is warning that Canada could be more deeply affected than any other country by political instability in the United States, citing the two nations’ tightly intertwined economic, security and geographic ties.
In its Top Risks for 2026 report, published this week, Eurasia Group said Canada would be “profoundly affected” by a potential political upheaval in the U.S., which it identified as the single greatest threat to global stability in the coming year.
The consultancy described the risk as a possible U.S. “political revolution,” driven by the actions of President Donald Trump, whom the report says is seeking to consolidate power, “capture the machinery of government, and weaponize it against his enemies.”
According to Eurasia Group, Canada’s exposure stems from its deep reliance on the U.S. for trade, defence and economic integration, meaning sudden political or policy shifts in Washington could have outsized consequences north of the border.
“The Trump administration has a view that they are the masters of the Western Hemisphere, and they can do what they want to whomever they want, whenever they want,” Axworthy said, adding that Canada should not assume shared values alone will safeguard its interests.
Arctic and Greenland emerge as pressure points
Axworthy pointed to the Arctic — and Greenland in particular — as an emerging geopolitical flashpoint that could directly affect Canadian sovereignty and security.
He cited recent U.S. actions abroad as a sign of what could come. “We’ve seen what [Trump’s] just done in Venezuela,” Axworthy said. “He will do the same thing on Greenland.”
“For us as Canadians, that means he’s going to have a chokehold on the Arctic itself. And that’s our backyard,” he added.
Eurasia Group’s report highlights intensifying competition among major powers in the Arctic as melting ice opens new shipping routes and access to critical minerals. The consultancy warned that Canada faces growing pressure as both the U.S. and Russia expand their military and strategic presence in the region.
Gaps in preparedness
Axworthy said Canada’s vulnerability is compounded by a lack of public engagement and preparedness at home.
“Canadians have to be much more engaged in this issue,” he said. “This can’t be something that is managed in a very small group in the Prime Minister’s Office. You have to bring Canadians along with you.”
He also cautioned that global cooperation is weakening at a time when it is most needed, pointing to efforts by the Trump administration to roll back international agreements governing climate, trade and security.
“Those are things that really we have to let our diplomatic system go full monty on,” Axworthy said.
Trade uncertainty and a pivotal year ahead
Beyond the risk of U.S. political upheaval, Eurasia Group also flagged what it termed “Zombie USMCA,” referring to the Canada–U.S.–Mexico trade agreement continuing without meaningful political commitment or modernization.
In December, Trump said the United States could allow the agreement to expire or seek a new deal with Canada and Mexico. Eurasia Group warned that prolonged uncertainty could chill investment, disrupt cross-border supply chains and leave Canada vulnerable to abrupt policy shifts amid escalating trade disputes.
The report also cited “Europe under siege” as a key risk, noting that ongoing conflict in Ukraine and economic strain across Europe could complicate Mark Carney’s efforts to diversify Canada’s trade away from the U.S.
For Canada, the consultancy warned, the combined effects could include increased defence spending, pressure to accept more refugees and economic spillover from political unrest among key European partners.