By Jeremy Kinsman

August 27, 2026

When Mark Carney gave his now-famous speech in Davos discerning a fateful “rupture” in the rules-based world order — and by inference, in trans-Atlantic relations — he didn’t call out the United States by name as one of its perpetrating hegemons.

Six months later, Carney was presented with an unusually clean test of his own doctrine based on that unspoken status. Would Canada accept an extraordinary —”the strong do what they can and the weak do what they must” — trade deal or pay a price for the sovereign freedom Carney had defended at Davos?

The Europeans in Davos on January 20th understood clearly Carney’s warning of powerful nationalist hegemons that exploit economic interdependence to dominate other countries. They had decided to acquiesce to the Trump administration’s harsh unilateral tariffs in the interest of predictability, and out of fear of escalation, or US withdrawal from European (and Ukrainian) security commitments.

But by the time of Carney’s speech, the EU community of nations was already feeling some remorse over having submitted so easily to America’s one-sided demands. Most Europeans in the audience applauded Carney’s diagnosis of the problem.

The EU itself is the world’s greatest experiment in pooling sovereignty (anathema to MAGA). Its member states are pre-disposed to multilateralism. They are particularly multilateralist on matters of world trade policy and process, in which the EU is a superpower, proud of its self-description as a rule-maker, not a rule-taker.

The EU Commission and the bigger member states welcomed Carney’s invitation to form coalitions of the willing to sustain multilateral cooperation to keep markets open, to enable fair dispute settlement, and to encourage middle-sized and smaller powers to mount joint defence issue-by-issue and sector-by-sector against any inroads on their sovereignty by bullying hegemons.

It wasn’t clear how this would come about, but they certainly welcomed Carney and Canada as a more intensely engaged partner, and that engagement has already produced an array of defence, trade, and other transatlantic collaboration agreements.

The US response to Carney’s speech had been sort of uncomprehending but its heavy-handed tone only served to reinforce Carney’s warnings about being dependent on an unpredictable hegemon.

Defence Under-Secretary Elbridge Colby later warned that governments should reject the “delusion of fashionable but superficial ideas like middle power alliances designed to exclude America;” allied defence efforts should be complementary to America rather than trying “vainly and futilely” to supplant it. Colby’s retort further legitimized Carney’s warning.

When Canada-US trade negotiations in the general ambit of CUSMA began in July, there was interest in Europe especially to see how Canada would respond to the U.S. intention to apply new and hefty punitive tariffs. Would Carney also have to knuckle under?

By all accounts, the negotiations over several weeks with U.S. Trade Representative Jamieson Greer were gruelling but professional. President Trump signalled last week after talking with the Prime Minister that a deal had been struck. Mr. Carney warned Canadians there would need to be concessions, that America had changed, that we would not return to the old relationship.

The question is whether Carney’s stand will redound as a positive thrust to return to a more robust and balanced transatlantic relationship while presenting a cautionary tale against any further indulgence of a demonstrably undependable and erratic America.

Without knowing the exact extent of the concessions demanded, questions arose in Canada and abroad about whether Canada’s Davos rhetoric had collided with a transformed reality.

Was it it an opportunity to deliver proof of concept, or to take a climb-down?

Carney, faced with an unprecedented, extra-legal, tariff-based assault on the established status quo of the bilateral trade relationship, had a choice between acquiescing to a predatory hegemon or following his own prescription at Davos by refusing to submit to a lie.

The Prime Minister called Canadian negotiators back to Ottawa in the last hour before the midnight deadline when the outrageous and CUSMA-violating US tariffs of 50% on $28 B of Canadian goods would come into effect.

Carney’s explanation to Canadians the following day was that unacceptable, last-minute demands had been made that would crush the Canadian car industry, limit Canada’s ability to sign trade agreements with foreign partners, threaten French-language labelling, and nix efforts to have US streaming services showcase more Canadian content in promotions to Canadian users.

Moreover, the US position would permit the US to change any aspect of the negotiated agreement at any time. As Carney said the following day, America has already proven that its signature on trade deals is “written in pencil”, which made the entire exercise meaningless.

Europeans reacted favourably to Carney’s decision to pull out.

“Countries that are committed to democracy and the rule of law — and do not accept the law of the jungle — must work together,” wrote Bernd Lange, who chairs the EU’s trade committee, on X. “We stand by Canada’s side.”

A Euronews piece framed it aspirationally: Canada walked away from Trump. Could the EU ever do the same?

The French press lauded the defence of essential points of sovereignty in Canada’s external relations, and cultural sovereignty on issues of language.

Germany also supported Canada. Chancellor Friedrich Merz and Carney spoke on August 24 on practical ways to reinforce cooperation in defence industries, energy supply, critical minerals and AI.

Notably, the UK press joined in supporting Canada. “No more!!” The progressive Guardian applauded. The conservative Telegraph called Canada’s stand a “template for resistance.” The Financial Times portrayed the US final offer as one Canada “could only refuse”, adding that PM Carney’s stance throughout had been “rational, not theatrical.”

While some business columnists worried about trying to “out-tough Donald Trump,” more speculated that Trump’s maximalism would “blow up in his face.” The FT opined US last-minute overreach “rescued Carney politically.” An Angus Reid poll this week revealed that 76% of Canadians believe that the prime minister did the right thing.

European commentary also validated the call for a united front, a sign of the unpopularity among Europeans of Donald Trump and his bullying. Opinion overall is decidedly in Carney and Canada’s favour.

The question is whether Carney’s stand will redound as a positive thrust to return to a more robust and balanced transatlantic relationship while presenting a cautionary tale against any further indulgence of a demonstrably undependable and erratic America.

There have already been many tests of Mark Carney’s Davos Doctrine since January, but none quite as stark as this. How consequential it is for Canada may already be written. How consequential it is for America is up to Donald Trump.

Policy Columnist Jeremy Kinsman served as Canada’s ambassador to Russia, high commissioner to the UK, ambassador to Italy and ambassador to the European Union. He is a Distinguished Fellow of the Canadian International Council.