The Davos Challenge
Canadian Prime Minister Mark Carney redefined the world order in less than 17 minutes on Tuesday. After his meteoric rise to the premiership, Carney has had plenty of time to reflect on the blip in the global timeline. His special address to the World Economic Forum in Davos, Switzerland, contained grim, succinct truths: The “middle powers” like Canada and the countries that comprise the European Union must reinforce multilateral coalitions to wrestle with an American hegemon that has tossed aside decades of cooperation and prosperity in a single year.
“Great powers can afford, for now, to go it alone,” Carney explained. “They have the market size, the military capacity and the leverage to dictate terms; Middle powers do not.” Instead, those countries must band together to better situate themselves against great-power offensives. In short, he warned, “the middle powers must act together, because if we’re not at the table, we’re on the menu.”
It wasn’t a novel proposition. Canadian audiences have heard several variations on this theme. This speech showcased Carney’s determination to rebrand Canada for the Davos crowd, especially the French, German, and British leaders who for the most part have shied away from confronting Donald Trump. “It resonated deeply with the Europeans because Mark Carney basically said what everybody else was thinking: It’s now time to stand up to this bullying behavior that we’ve been subjected to,” says Fen Osler Hampson, a professor of international affairs at Ontario’s Carleton University. “He’s a globalist—and I say that in a positive way—who is basically saying, we’ve moved to a post-global order.”
Carney is the original “Davos man,” the former head of the central banks of both Canada and Great Britain, who has attended dozens of World Economic Forum meetings. He knows a fair number of the gathered international cognoscenti, some of the most powerful heads of state and movers and shakers in the worlds of business, finance, technology, media, and academia. Davos is the intellectual home turf of sorts for the onetime self-identified European who renounced his Irish and British citizenship before he became prime minister.
“The middle powers must act together, because if we’re not at the table, we’re on the menu.”
Canadian Prime Minister Mark Carney
There had been a fundamental shift in the ethos of the U.S. that demanded a commensurate response in Canada’s behavior. “This bargain” with America, he said at Davos, “no longer works … We are in the midst of a rupture, not a transition.” Carney has shocked Canadians, who are devastated by the imposition of a U.S. tariff regime and the mocking of the long friendship between the two countries, with the observation that what is transpiring in the United States is not some one-off that waiting out the Trump administration will cure.
The “51st state” jabs have rankled Canadians (and many Americans), and Carney has continually underscored his deep disdain for comments that refer to Canada as anything other than a sovereign country. When Trump repeated that “invitation” during Carney’s first visit to the White House, the prime minister shot back that “Canada is not for sale.”
“The old relationship we had with the United States, based on deepening integration of our economies and tight security and military cooperation, is over,” Carney said in Ottawa last spring. Not wanting to harm friends across the border, but realizing the stakes, ordinary Canadians have launched successful, ongoing boycotts.
If there were any doubters left in Canada believing that the Trump administration had abandoned its neo-imperialistic aims, an altered image of a map with Venezuela, Greenland, and Canada draped in American flags that the president shared online before he arrived in Switzerland was probably a wake-up call.
Canada has its own unique international stature. “We’re going to try to defend the rules, even though others aren’t playing by the rules,” says Hampson. The Davos speech, he added, “was an important message domestically, because we’ve always seen ourselves as kind of the champions of a rule-based order.” The country has its own superpower as an energy producer, but it also needs new allies and new markets for its products, goods, and services. Trump has halted preliminary USMCA discussions and has since declared the pact “irrelevant.”
Canada has secured defense procurement arrangements with the EU, while Carney underlined his nation’s “unwavering” commitment to NATO’s Article 5 and mentioned Canada’s own regional defense capabilities, aircraft submarines, and “boots on the ground.” Carney told the Davos audience that Canada had worked out “12 other trade and security deals on four continents in six months.” His trips and meetings have been designed to shore up old ties and solidify new ones, and to set up “guardrails” in more complex relationships. Carney solidified ties with the EU and members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom, and Vietnam), which makes up between 32 and 37 percent of global trade.
His recent visit to China produced a relaxation of tariffs on major Canadian exports like canola meal (for animal feed) and lobster. Canada reciprocated and established a quota on Chinese EVs of up to 49,000 vehicles annually. These shifts were significant milestones, given the years of tensions stemming from the 2017 arrest of a Chinese executive in Canada and the subsequent detention of two Canadians in China. Carney is also scheduled to visit India in February after years of tensions. At home, he has persuaded the provinces and territories to eliminate internal trade barriers, which had been more difficult to navigate than some international borders.
But it was the Greenland crisis more than anything else that convulsed the Davos meetings. During Trump’s diatribe—he accused Carney of being ungrateful for American “freebies” and insisted that “Canada lives because of the U.S.”—he delivered one surprise, backtracking on his threat to attack the island. After his speech, there was another: He took new tariffs off the table and held out the “framework of a future deal” after talks with NATO Secretary General Mark Rutte. The broad strokes appear to involve talks on space-based defensive weapons, rights to Greenlandic mineral resources, and an increased American military presence. Details are still sparse, though it appears that additional U.S. military bases in Greenland will be sovereign American territory, an arrangement similar to British bases in Cyprus.
The Europeans appear to have finally grasped that military and tariff threats will continue and that trying to mollify Trump on his territorial obsessions won’t work. They have been here before. In 1938, after Britain agreed to Germany’s annexation of the Sudetenland in Czechoslovakia, Winston Churchill addressed Parliament as a Conservative Party backbencher two years before he became prime minister. “And do not suppose that this is the end. This is only the beginning of the reckoning,” he said. “This is only the first sip, the first foretaste of a bitter cup which will be proffered to us year by year unless by a supreme recovery of moral health and martial vigour, we arise again and take our stand for freedom as in the olden time.”
Carney left Davos without meeting with Trump.
The threat of military force during the Greenland crisis did jolt the stock market, and the president finally noticed. Treasury Secretary Scott Bessent said that he wasn’t concerned about another development: A Danish pension fund sold off its U.S. Treasury bond holdings Tuesday. He claimed that Denmark was also “irrelevant.” On Wednesday, a Swedish pension fund also decided to sell off its holdings.
Remember that Carney has helmed not one but two national banks and that Canada also holds billions of dollars in Treasurys. “People sometimes forget that there’s a lot of, shall we say, finance capital out there that could do a lot of damage,” says Hampson. “Trump could retaliate, but it would be disastrous for everybody.”
Carney’s address earned him an uncommon standing ovation. He has emerged as not only a North American leader but a European one. The prime minister has stepped into the global leadership vacuum to persuade the middle powers to team up to confront the test they never expected. It was a Churchillian moment.
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