At Davos 2026, Canadian Prime Minister Mark Carney delivered a speech that received something rare at these gatherings: a standing ovation. Carney argued that the world is not in a “transition” but a “rupture.”

The speech drew on Václav Havel’s 1978 essay The Power of the Powerless, specifically the parable of the greengrocer who displays the slogan “Workers of the World, Unite!” in his shop window. The grocer doesn’t believe the slogan. He displays it to signal submission, to live in harmony with the regime. Carney’s application was pointed: for years, US allies have displayed the signs of the liberal international order, pretending the partnership was mutual, that rules mattered, that values were shared. Even as reality diverged.

“It is time for companies and countries to take their signs down.”

Days later, Canada became the first non-European G7 nation to join the EU’s SAFE defense initiative, a €150 billion fund for joint European defense procurement. Canadian firms now have preferential access to the European defense market, treated on par with EU companies. Days before Davos, Carney had traveled to Beijing to secure a preliminary trade agreement on electric vehicles, 49,000 units at 6.1% tariff, compared to the 100% tariff the US imposes.

Carney articulated a framework of “middle power realism” built on three observations.

(1) The US is no longer a reliable partner. American politics has shifted in ways that make transactional unilateralism the new baseline beyond Trump himself. The “Donroe Doctrine”, a portmanteau of “Donald” and “Monroe”, asserts American hegemony over the Western Hemisphere with a resource-driven, security-focused twist. It treats allies as protection rackets and international law as an impediment.

(2) Nostalgia is dangerous. The pre-2016 order isn’t coming back. Waiting for “normal” to return is a strategy for decline. Middle powers that don’t build domestic strength and horizontal coalitions will find themselves, as Carney put it invoking Thucydides, “on the menu.”

(3) Sovereignty requires the capacity to say no. That means diversified partnerships, even with rivals. Canada’s China deal infuriated Trump, who accused Carney of allowing a “Trojan Horse” into the continent. But from Ottawa’s perspective, the ability to trade with Beijing is precisely what makes Canadian sovereignty credible. You can’t negotiate from strength if you have no alternatives.

The European response follows similar logic. During the Greenland crisis, when Trump threatened tariffs on eight European nations and refused to rule out military force to “secure” the island, the EU threatened to deploy its Anti-Coercion Instrument against the United States. For the first time, the bloc signaled willingness to engage in a trade war with its primary security guarantor to protect the sovereignty of a member state.

The SAFE instrument itself is designed for strategic autonomy. Strict “Buy European” provisions limit subcontractors from non-EU countries to 15-35% of contract value, phased out within two years. The explicit goal is ITAR-free supply chains, defense procurement that doesn’t depend on American permission. Meanwhile, the UK, which refused Trump’s Board of Peace but remains excluded from SAFE due to post-Brexit negotiating failures, finds itself in strategic limbo. Alienated from Washington, locked out of European defense architecture, the “mid-Atlantic bridge” is collapsing.

At Davos, China positioned itself as the defender of the UN Charter, rejecting Trump’s “Board of Peace” as a parallel structure that undermines international law. China was defending liberal institutions while the US sought to dismantle them. China benefits from a multipolar system with weak enforcement mechanisms. The US benefits from a unipolar system where it makes the rules. Middle powers benefit from rules that constrain the strong, which is why the Global South found validation in Carney’s speech. The admission that the “Rules-Based Order” was often cover for Western interests resonated with nations that experienced that hypocrisy firsthand.

The term “middle power” has always been slightly embarrassing, an admission of limits, a confession that you’re not at the top table. But there’s a realism emerging in these countries that the great powers lack. They can’t afford illusions about the international system because they don’t control it.

Taking down the sign also means operating without the protection the illusion provided. Countries that challenge the existing order face consequences. Canada is betting it can navigate between giants, trading with China, defending alongside Europe, maintaining what leverage it has with Washington. The EU is betting it can build autonomous defense capacity fast enough to matter. Japan, Australia, and others are making similar calculations, hedging relationships that used to be taken for granted.