Mark Carney, the Prime Minister of Canada, delivered a stark and compelling address at the World Economic Forum in Davos, Switzerland, on 20 January 2026. His message resonated deeply with European leaders, urging them to confront the harsh realities of a world where great powers increasingly assert might over right.
A Rupture in International Relations
In his incisive analysis, Carney described the current geopolitical climate as "a rupture, not a transition", highlighting the coarsening of international relations. He argued that the era of a western-led rules-based order, despite its imperfections, is unlikely to return. This clear-eyed assessment stands in sharp contrast to the hesitation observed among many European policymakers, who still cling to hopes of appeasing figures like former US President Donald Trump.
The Strategy for Middle Powers
Carney outlined a proactive hedging strategy that Canada is already implementing. This includes diversifying trade and supply chains, and even opening markets to Chinese electric vehicles to counteract Trump's tariffs on Canadian automobiles. He emphasised that liberal democratic "middle powers", such as Canada and European nations, must build coalitions to defend principles like territorial integrity, the rule of law, free trade, climate action, and human rights.
He warned starkly: "When we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what's offered. We compete with each other to be the most accommodating. This is not sovereignty. It's the performance of sovereignty while accepting subordination."
Europe's Critical Juncture
The urgency of Carney's message is underscored by recent events, including Trump's demands to take control of Greenland from Denmark and threats of punitive tariffs against European allies. An emergency EU summit was convened to respond to these provocations, with leaders considering retaliatory tariffs worth €93bn on US goods and activating the EU's anti-coercion instrument.
Internal Challenges and External Opportunities
However, European unity faces internal tests. The European Parliament recently postponed a vote on tariff cuts for US goods, a move that charges an economic price for Trump's threats. Yet, in a contradictory step, it also sent the Mercosur trade pact with South American economies for judicial review, delaying ratification and potentially undermining trade diversification efforts.
This highlights the delicate balance the European Commission must strike: forfeiting economic benefits or defying legislative hurdles to implement agreements provisionally.
Embracing a New Path
Carney's core lesson is that political leaders must deal with the world as it is, not as they wish it would be. He cautioned that "nostalgia is not a strategy", urging Europe to abandon outdated Atlanticism and avoid futile attempts to satisfy Trump's insatiable demands through compliments or concessions.
Instead, he advocates for Europe to pursue a "painful emancipation", forging alliances with like-minded countries such as Japan, Australia, Brazil, and India. By creating new trade pacts and rules, Europe can collectively counter coercion and preserve the torch of rules-based governance.
Now is the moment for decisive action. Carney has charted a course; it is up to European leaders to follow it with unity and resolve, building a coalition that asserts sovereignty through strength in numbers.
