Prime Minister Mark Carney arrived at the World Economic Forum in Davos, Switzerland with a message: Canada can no longer assume the rules will hold as the balance of power begins to tip.
In a special address at the Davos 2026 meeting, Carney warned of “a rupture in the world order” and urged so-called middle powers to work together to stop stronger states from using tariffs and threats as leverage in international affairs.
The pitch doubled as a trade brief.
Carney’s office said the new government is pursuing “principled and pragmatic” engagement, with a focus on diversifying markets and pulling new capital into energy, manufacturing, defence and technology industries.
That ambition is set against a trade environment shaped by U.S. tariffs, a stalled transition deal with the U.K., unfinished European ratification of the Canada-EU agreement and a thaw in relations with China.
Canada’s exposure to U.S. policy shifts has been hard to miss.
Federal documents show that U.S. tariffs imposed in 2025 affected Canadian exports and the auto sector, prompting Canada to respond with countermeasures that still include steel, aluminum and automobiles.
Even with some counter-tariffs lifted in September 2025, the remaining measures underscore how quickly market access can become a bargaining chip.
At Davos, Carney held meetings with European leaders and NATO’s chief as the Arctic and supply chains rose to the top of the agenda, according to the Prime Minister’s Office.
The release pointed to a push for “resilient” trade networks, framed as protection against tariff shocks and security disruptions.
China was the other anchor.
Earlier in January, Carney visited Beijing and announced a new strategic partnership that Ottawa says will see China cut combined tariffs on Canadian canola seeds to about 15 per cent by March 1, 2026.
Chinese importers moved quickly after the trip, buying as many as ten cargoes of Canadian canola for shipment between February and April.
For producers, that is cash flow and stability amid great economic uncertainty. For critics, it is also a reminder that Canada’s most obvious alternatives to the U.S. market sit inside a rival power bloc.
The European Union remains a predictable pillar on paper.
The European Commission says 99 per cent of tariff lines have been or will be abolished under the Canada-EU trade agreement, with some provisions still depending on member-state politics and court scrutiny.
Global Affairs Canada says the Canada-U.K. Trade Continuity Agreement replicates the core benefits of the Canada-EU agreement and remains in force, while an upgraded pact has yet to be finalized.
Those files converged at Davos in a way the summit does best: with closed-door conversations, investment pitches and a rolling negotiation over what “stability” means.
For some labour economists and development scholars, that word often translates into a simple priority order: protect returns to capital first, then manage the social consequences.
Carney’s government argues the opposite case.
Its Davos briefing stressed competition for investment, productivity growth and the idea that market diversification can reduce leverage held by any single partner.
The immediate test will be whether the promised diversification produces measurable results without deepening the contradictions it is meant to solve: reliance on U.S. security guarantees, dependence on export markets and an economic model that still asks workers and households to absorb shocks created elsewhere. Canada’s involvement at Davos stressed competition.
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