Mark Carney seeks new friends and trading partners in Davos as Donald Trump upends the global order

Carney is adopting a transactional approach to international relations in order to execute what he hopes is a transformative agenda for Canada.

Out is any preaching about “Values,” the title of a dense and lengthy book Carney wrote before entering politics. In is “value-based realism,” as he alluded to in Beijing.

Carney is on the hunt for new friends, trading partners, military allies or simply “like-minded” countries that agree on enough common ground to form new coalitions to advance Canadian trade, secure military alliances, and safeguard Canadian interests.

What’s not yet clear is whether the prime minister’s more pragmatic approach is to Canadians’ benefit, or whether it will ultimately be at odds with it.

That question may be partly answered in Davos this week.

In the Swiss mountain town where the World Economic Forum gathers political leaders, CEOs and outsized media attention, Carney is among his peers, practising his own kind of statecraft, asserting himself as a central player in brokering new coalitions.

It’s all in a bid to manage the fallout of U.S. President Donald Trump’s upending of the global trading system, the president’s assertion of American dominance over the Western Hemisphere, his threats to acquire control of Greenland, and the erosion of the postwar NATO military alliance that could be a consequence of his aggressive play, never mind Trump’s effort to push his own view of what peace between Russia and Ukraine should look like.

Carney has more than a front-row seat at Davos. He is a star attraction. He’s been here 30 times before.

He’ll meet with other star attractions, including France’s Emmanuel Macron, and CEOs he hopes to entice to invest in Canada.

The former central banker and investment banker last came in 2024 as the UN special envoy on climate finance.

On Tuesday, Carney will be onstage at the World Economic Forum for a morning fireside chat and will deliver a late day plenary speech.

Trump will be at Davos, too, but there was no immediate word about when or if the North American neighbours will meet.

It seems likely that the two will talk, however, because Carney has just agreed to take on another role as member of Trump’s so-called Board of Peace, the executive committee expected to oversee the reconstruction of Gaza and Trump’s broader Middle East peace initiative.

The Canadian prime minister’s participation lends Trump’s panel not only Carney’s personal credibility, but also the weight of Canada’s global brand.

Whether that is a good thing or not — and whether there is reputational risk to both over the long run — remains to be seen.

Carney said decisions about how the board will operate and the reported $1-billion cost to become a permanent member of Trump’s panel are still being worked out. His officials said Canada was not asked to pay $1 billion to sign on. Carney said he joined to ensure humanitarian aid gets delivered to Gaza, the territory is stabilized and a path to a “two-state solution” is secured.

What is clear to Carney and his team is there is a whole new geopolitical and diplomatic ball game afoot, and Carney’s role in it is something he about which he is both keen and driven to take a swing at.

Sources with knowledge of the prime minister’s thinking on the U.S. and Trump have told the Star that Carney took Trump’s “51st state” threats to annex Canada and acquire Greenland seriously from the outset last spring, even when some European leaders did not.

Hence, Carney is now deciding whether and how to deploy Canadian troops to diffuse Trump’s latest Greenland acquisition threats. He publicly stated he’s concerned about the escalation in tensions. Greenland’s future is up to Greenland and Denmark, Carney said Sunday, and its security is ultimately a responsibility of NATO.

As media outlets including the Star reported Monday, Canada is looking at several scenarios to assure Trump that NATO can enhance security in the Arctic region. Those include participation in military exercises co-ordinated by Denmark, or in a “NATO-adjacent” operation led by a subset of NATO members that could be scaled up. 

On defence as on trade, it’s all about finding solutions — something Carney said this week is Canada’s “responsibility.”

Last April, Carney said if the U.S. doesn’t want to lead on ensuring free global trade, Canada would step up and lead.

Asked on Sunday, after Carney’s pivot toward China, if that’s what we’re witnessing now, Carney gave a lengthy answer.

“What’s happening at pace and at scale is that a number of the multilateral relationships, institutions, rules-based systems are being eroded by various decisions of various countries, the United States included,” Carney said in Doha.

“And the consequence of that is that there’s a reduction in freer trade, much more trade is tariff-based or otherwise restricted, and there is virtually no, with all due respect to those who are trying to push it, but virtually no multilateral progress in these areas.

“Where there is progress, and where Canada and like-minded countries are looking to make progress is through plurilateral deals. Fancy word,” Carney acknowledged.

What it means, he said, is that coalitions of “multiple countries but not all countries” can work to advance common views and causes, such as ensuring free trade among willing nations that wish to continue doing business in an unrestricted manner despite the biggest economy in the world, the United States, rolling back agreements and turning to tariffs to set up protectionist walls around American industries.

Carney pointed to the trading bloc known as the Trans-Pacific Partnership, and to the European Union — both amongst European countries and the European Union working with like-minded countries, Canada included, as examples of such coalitions. Canada under Carney has become part of the EU’s ReArm Europe project — an effort to increase defence spending and leverage it to build dual-use infrastructure and diversify defence supply chains as the U.S. challenges traditional allies to step up spending.

There is also the French- and British-led Coalition of the Willing, Canada included, of countries vowing security guarantees for Ukraine in a bid to end Russia’s war there, driven in part by Trump’s declarations the U.S. is not willing to shoulder the long-term defence burden.

And now there is Carney’s reversal of Canada’s U.S.-aligned tariffs on China, and his willingness to enter into an even broader partnership with China by advocating for China’s desire to join the Trans-Pacific Partnership. Carney said he discussed it with President Xi Jinping, and is also working to “build a bridge between the European Union and the Trans-Pacific Partnership.”

“We’re brokering, helping to broker bringing that together,” Carney said Sunday.

“That is not as good as a multilateral system that works, but it’s far better than a system that’s splintering into autarky and in the extreme and that’s what we’re working towards.”

It’s a gamble.

Carney has clearly decided China is one partner he can work with, whether or not it annoys Trump.

Qatar, despite its human rights record, is another.

But China has not always been the champion of multilateralism Carney declared it to be. Witness its track record in flouting World Trade Organization rules or its obstruction of the World Health Organization’s probe of the origins of the COVID-19 pandemic.

Nevertheless, Carney uncoupled Ottawa’s tariffs on Chinese electric vehicles from Washington’s, lowering Ottawa’s duties from 100 per cent to six per cent on a small number of imports of Chinese EVs starting Mar. 1, that will be “capped” at 49,000 this year in exchange for tariff relief from Chinese tariffs on Canadian canola and seafood.

Trump has had, so far, a muted response.

“It’s a good thing for him to sign a trade deal. If he can get a trade deal with China, he should do that,” Trump said Friday.

Later, Canadian officials admitted they’d given Trump notice of the tariff deal with China, but they believe Trump’s low-key reaction was in part due to his own trip in April to Beijing, where they expect the president too will try to strike a deal on Chinese electric vehicle tariffs to lure Chinese technology and investment in auto production in the U.S.

But Carney got there first.

In what Carney dubbed in Beijing a “new world order” where old rules of global trading no longer apply, it seems the prime minister’s search for new coalitions is an effort to ensure it’s not every country and leader for themselves.