Good morning, I’m Paul Waldie, European correspondent at The Globe and Mail. I recently got back from attending Europe’s largest tech trade show, VivaTech, which could hardly have come at a better time for dozens of Canadian startups. The four-day exhibition in Paris this month attracted more than 14,000 delegates from around the world, and Canada took centre stage. More on that shortly, but first, a note to readers: Business Brief returns on Wednesday after a short break for Canada Day.

Taxes: The Republicans have pulled the so-called revenge tax that targeted foreign investors.

Trade: Canada remains publicly committed to the goal of getting all U.S. tariffs removed. But Ottawa is beginning to manage expectations. Plus: China eases restrictions on rare earth minerals to the U.S.

Tech: Nobel laureate Geoffrey Hinton has a message for Canada’s new AI Minister, Evan Solomon: “This stuff needs regulating.”

Tension: Donald Trump’s threats against Fed Chairman Jerome Powell is putting a damper on the U.S. dollar.

• Friday: GDP data for April and a flash estimate for May will offer a snapshot of how Canada’s economy is holding up in a trade war.

Now, back to Canada’s big moment in Paris. VivaTech’s organizers had named Canada “country of the year,” a title handed out annually to the nation organizers believe is excelling in tech. Given the trade tensions with U.S. President Donald Trump and his threats to annex Canada, the designation proved timely. That’s probably why Canada’s delegation in Paris topped 600, far more than any other country.

There’s never been more incentive for Canadian entrepreneurs to look to Europe for expansion opportunities. But it’s a daunting prospect, given an overwhelming dependence on trade with our southern neighbour.

Canada’s goods-and-services trade with the U.S. tops $1-trillion annually, roughly five times more than our trade with the European Union’s 27 member nations. In services alone, where the tech sector dominates, trade with the U.S. totalled $227.6-billion in 2023, compared with $78.1-billion with the EU.

We followed three Canadian entrepreneurs during VivaTech – Alexander Jacquet, Alex Qi and Emily Charry Tissier – to get an idea of the opportunities and challenges their businesses face in Europe. All three see Europe, not the U.S., as the best place to expand.

Jacquet started Vancouver-based Trusting Pixels in 2018, building on his know-how in the film business to develop a software that can detect digital alterations in photographs and videos posted online. Qi launched Pontosense in Waterloo, Ont., six years ago with his father, an ex-senior engineer at BlackBerry. They make sensors that can be used in cars and at home, to monitor movements and keep track of vital signs. And Charry Tissier founded Whale Seeker in 2018, a Montreal-based venture that uses AI to identify the locations of whales and other sea life.

All three spent their time at VivaTech chasing customers and overcoming obstacles – such as language, national preferences and varying regulations. And while they all acknowledged the difficulties Europe can present, all three came away from Paris more convinced that their future lies overseas.

When President Donald Trump imposed the 25-per-cent tariff on imports from Canada in March, he left a loophole allowing goods that meet certain United States-Mexico-Canada Agreement rules to dodge the duties. While many economists have estimated 80 per cent of Canada’s exports could qualify for the USMCA break (versus the 40 per cent of exports last year for which companies actually bothered filling in the paperwork), early numbers crunched by Capital Economics show USMCA compliance has only ramped up for energy products. Most other manufactured goods saw their duty-free share stall or slip. Assuming Trump’s tariffs stay in place, that could mean a bigger long-term hit to Canadian trade and growth than many economists first thought.

Personal finance: The number of Canadians with workplace pensions has been on the rise, according to Statistics Canada.

Return to office: BMO becomes third major lender to require employees to work in the office four days a week come the fall.

ROB Magazine: How Newfoundland’s Crosbie Group turned disaster into opportunity.