--- title: "The Rise of Middle Power Realism" description: "At Davos 2026, Carney told allies to take down the signs of the liberal order. Middle powers are learning to navigate between giants without illusions." date: 2026-01-27 updated: 2026-05-04 author: "Philipp D. Dubach" categories: - "Macro" keywords: - "Mark Carney Davos 2026 speech" - "middle power foreign policy" - "Donroe Doctrine Trump" - "Canada EU SAFE defense" - "rules-based international order collapse" - "trade policy economics" - "tariff response strategy" - "economic coercion" type: "Analysis" canonical_url: "https://philippdubach.com/posts/the-rise-of-middle-power-realism/" source_url: "https://philippdubach.com/posts/the-rise-of-middle-power-realism/index.md" content_signal: search=yes, ai-input=yes, ai-train=yes --- # The Rise of Middle Power Realism *Philipp D. Dubach · Published January 27, 2026 · Updated May 4, 2026* ## Key Takeaways - At Davos 2026, Carney declared the world has experienced 'a rupture, not a transition' and used Havel's greengrocer parable to argue that allies have been displaying signs of a liberal order that no longer exists - Canada joined the EU's SAFE defense fund, a 150 billion euro procurement program, becoming the first non-European G7 nation with preferential access to European defense markets - Canada secured a preliminary trade deal with China on 49,000 EVs at 6.1% tariff, compared to the 100% tariff the U.S. imposes, demonstrating the leverage that comes from diversified partnerships - The EU threatened to deploy its Anti-Coercion Instrument against the United States during the Greenland crisis, the first time the bloc signaled willingness to trade-war its primary security guarantor --- At Davos 2026, Canadian Prime Minister [Mark Carney](https://en.wikipedia.org/wiki/Mark_Carney) delivered a speech that received something rare at these gatherings: a standing ovation. Carney told the assembled elites what they already knew but hadn't said aloud: [the world is not in a "transition" but a "rupture."](https://www.weforum.org/stories/2026/01/davos-2026-special-address-by-mark-carney-prime-minister-of-canada/) The speech drew on Václav Havel's 1978 essay _The Power of the Powerless_, specifically [the parable of the greengrocer](https://www.nonviolent-conflict.org/resource/the-power-of-the-powerless/) 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." What followed the speech was more interesting than the speech itself. Days later, Canada became the first non-European G7 nation to join the EU's [SAFE defense initiative](https://www.pm.gc.ca/en/news/news-releases/2025/12/01/prime-minister-carney-secures-canadas-participation-european-unions), a €150 billion fund for joint European defense procurement. Canadian firms now have [preferential access](https://www.squirepattonboggs.com/insights/publications/canadian-companies-to-be-allowed-preferential-access-under-eu-safe-defence-investment-program/) 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](https://www.china-briefing.com/news/china-canada-trade-deal-preliminary-agreement/) on electric vehicles, 49,000 units at 6.1% tariff, compared to the 100% tariff the US imposes. The intellectual framework Carney articulated has a name now: "middle power realism." It's built on three observations. (1) The US is no longer a reliable partner. Not because of Trump specifically, but because American politics has shifted in ways that make transactional unilateralism the new baseline. The ["Donroe Doctrine"](https://en.wikipedia.org/wiki/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."](https://www.theguardian.com/business/live/2026/jan/20/davos-von-der-leyen-he-macron-carney-wef-greenland-trump-uk-unemployment-business-live-news-updates) *Related: [Britain's Strategic Limbo](https://philippdubach.com/posts/britains-strategic-limbo/)* (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"](https://www.washingtonexaminer.com/news/world/4433043/carney-no-intention-signing-free-trade-deal-china/) 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](https://www.theguardian.com/commentisfree/2026/jan/23/europe-trump-climbdown-genuflecting-tacos-greenland) 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](https://defence-industry-space.ec.europa.eu/eu-defence-industry/safe-security-action-europe_en) 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](https://behorizon.org/safe-mechanism-reshaping-eu-defence-integration/) 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. There's a strange inversion happening in the international system. At Davos, [China positioned itself as the defender of the UN Charter](https://timesofindia.indiatimes.com/world/china/its-not-about-gaza-is-un-real-target-of-trumps-board-of-peace-china-emerges-as-unlikely-defender/articleshow/126967201.cms), rejecting Trump's "Board of Peace" as a parallel structure that undermines international law. The authoritarian superpower defending liberal institutions while the democratic superpower seeks 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](https://en.wikipedia.org/wiki/2026_Mark_Carney_speech_at_the_World_Economic_Forum). The admission that the "Rules-Based Order" was often cover for Western interests resonated with nations that experienced that hypocrisy firsthand. *Related: [Big in Japan](https://philippdubach.com/posts/big-in-japan/)* 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. They have to see clearly or get crushed. Carney's greengrocer metaphor cuts both ways. Yes, taking down the sign exposes the illusion. But it also means operating without the protection the illusion provided. The grocer who removes the slogan faces consequences. So do countries. 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. --- ## Frequently Asked Questions ### What is middle power realism? Middle power realism is a foreign policy framework articulated by Canadian PM Mark Carney at Davos 2026. It's built on three observations: the US is no longer a reliable partner, nostalgia for the pre-2016 order is dangerous, and sovereignty requires the capacity to say no. Middle powers must build domestic strength, diversify partnerships even with rivals, and form horizontal coalitions to avoid being "on the menu." ### What did Mark Carney say at Davos 2026? Using Václav Havel's greengrocer parable, Carney argued that US allies have been displaying signs of a liberal order that doesn't actually exist. He declared the world has experienced "a rupture, not a transition," and called on middle powers to stop pretending and instead build autonomous capacity. The speech received a rare standing ovation. ### What is the Donroe Doctrine? The Donroe Doctrine is a portmanteau of "Donald" and "Monroe," describing Trump's policy of asserting American hegemony over the Western Hemisphere through economic coercion, military pressure, and territorial ambitions. It treats allies as protection rackets and international law as an impediment to American interests. ### Why did Canada join the EU SAFE defense fund? Canada became the first non-European G7 nation to join SAFE, the EU's €150 billion joint defense procurement fund. Canadian firms now have preferential access to the European defense market, treated on par with EU companies. The move exemplifies middle power realism: diversifying partnerships to maintain leverage and sovereignty. ### Why is the UK excluded from SAFE while Canada was accepted? The UK remains excluded from SAFE due to post-Brexit negotiating failures and sovereignty concerns over the strict "Buy European" provisions. Canada accepted the constraints; the UK didn't. Britain now finds itself in strategic limbo: alienated from Washington's transactional approach, locked out of European defense architecture. --- Canonical: https://philippdubach.com/posts/the-rise-of-middle-power-realism/ Content-Signal: search=yes, ai-input=yes, ai-train=yes This file is the canonical machine-readable variant of https://philippdubach.com/posts/the-rise-of-middle-power-realism/. Author: Philipp D. Dubach (https://philippdubach.com/).