It’s
a pleasure – and a duty – to be with you at this turning point for Canada and
for the world. Today,
I’ll talk about the rupture in the world order, the end of a nice story, and
the beginning of a brutal reality where geopolitics among the great powers is
not subject to any constraints. But
I also submit to you that other countries, particularly middle powers like
Canada, are not powerless. They have the capacity to build a new order that
embodies our values, like respect for human rights, sustainable development,
solidarity, sovereignty, and territorial integrity of states.
The
power of the less powerful begins with honesty. Every
day we are reminded that we live in an era of great power rivalry. That the
rules-based order is fading. That the strong do what they can, and the weak
suffer what they must. This
aphorism of Thucydides is presented as inevitable – the natural logic of
international relations reasserting itself. And faced with this logic, there is
a strong tendency for countries to go along to get along. To accommodate. To
avoid trouble. To hope that compliance will buy safety. It
won’t. So,
what are our options?
In
1978, the Czech dissident Václav Havel wrote an essay called The Power of the
Powerless. In it, he asked a simple question: how did the communist system
sustain itself? His
answer began with a greengrocer. Every morning, this shopkeeper places a sign
in his window: “Workers of the world, unite!” He does not believe it. No one
believes it. But he places the sign anyway – to avoid trouble, to signal
compliance, to get along. And because every shopkeeper on every street does the
same, the system persists.
Not
through violence alone, but through the participation of ordinary people in
rituals they privately know to be false. Havel
called this “living within a lie.” The system’s power comes not from its truth
but from everyone’s willingness to perform as if it were true. And its
fragility comes from the same source: when even one person stops performing —
when the greengrocer removes his sign — the illusion begins to crack. It
is time for companies and countries to take their signs down.
For
decades, countries like Canada prospered under what we called the rules-based
international order. We joined its institutions, praised its principles, and
benefited from its predictability. We could pursue values-based foreign
policies under its protection.
We
knew the story of the international rules-based order was partially false. That
the strongest would exempt themselves when convenient. That trade rules were
enforced asymmetrically. And that international law applied with varying rigor
depending on the identity of the accused or the victim.
This
fiction was useful, and American hegemony, in particular, helped provide public
goods: open sea lanes, a stable financial system, collective security, and
support for frameworks for resolving disputes. So,
we placed the sign in the window. We participated in the rituals. And largely
avoided calling out the gaps between rhetoric and reality.
This
bargain no longer works. Let
me be direct: we are in the midst of a rupture, not a transition. Over
the past two decades, a series of crises in finance, health, energy, and
geopolitics laid bare the risks of extreme global integration. More
recently, great powers began using economic integration as weapons. Tariffs as
leverage. Financial infrastructure as coercion. Supply chains as
vulnerabilities to be exploited.
You
cannot “live within the lie” of mutual benefit through integration when
integration becomes the source of your subordination. The
multilateral institutions on which middle powers relied— the WTO, the UN, the
COP – the architecture of collective problem solving – are greatly diminished.
As
a result, many countries are drawing the same conclusions. They must develop
greater strategic autonomy: in energy, food, critical minerals, in finance, and
supply chains. This
impulse is understandable. A country that cannot feed itself, fuel itself, or
defend itself has few options. When the rules no longer protect you, you must
protect yourself. But
let us be clear-eyed about where these leads. A world of fortresses will be
poorer, more fragile, and less sustainable.
And
there is another truth: if great powers abandon even the pretense of rules and
values for the unhindered pursuit of their power and interests, the gains from
“transnationalism” become harder to replicate. Hegemons cannot continually
monetize their relationships. Allies
will diversify to hedge against uncertainty. Buy insurance. Increase options.
This rebuilds sovereignty – sovereignty that was once grounded in rules but will be increasingly anchored in the ability to withstand pressure.
As
I said, such classic risk management comes at a price, but that cost of
strategic autonomy, of sovereignty, can also be shared. Collective investments
in resilience are cheaper than everyone building their own fortress. Shared
standards reduce fragmentation. Complementarities are positive sum.
The
question for middle powers, like Canada, is not whether to adapt to this new
reality. We must. The question is whether we adapt by simply building higher
walls – or whether we can do something more ambitious. Canada
was amongst the first to hear the wake-up call, leading us to fundamentally
shift our strategic posture. Canadians
know that our old, comfortable assumption that our geography and alliance
memberships automatically conferred prosperity and security is no longer valid.
Our
new approach rests on what Alexander Stubb has termed “values-based realism” –
or, to put it another way, we aim to be principled and pragmatic. Principled
in our commitment to fundamental values: sovereignty and territorial integrity,
the prohibition of the use of force except when consistent with the UN Charter,
respect for human rights. Pragmatic
in recognizing that progress is often incremental, that interests diverge, that
not every partner shares our values. We are engaging broadly, strategically,
with open eyes. We actively take on the world as it is, not wait for a world we
wish to be.
Canada
is calibrating our relationships, so their depth reflects our values. We are
prioritizing broad engagement to maximize our influence, given the fluidity of
the world order, the risks that these poses, and the stakes for what comes next. We
are no longer relying on just the strength of our values, but also on the value
of our strength. We
are building that strength at home.
Since
my government took office, we have cut taxes on incomes, capital gains and
business investment, we have removed all federal barriers to interprovincial
trade, and we are fast-tracking a trillion dollars of investment in energy, AI,
critical minerals, new trade corridors, and beyond.
We
are doubling our defense spending by 2030 and are doing so in ways that builds
our domestic industries. We
are rapidly diversifying abroad. We have agreed a comprehensive strategic
partnership with the European Union, including joining SAFE, Europe’s defense
procurement arrangements. We
have signed twelve other trade and security deals on four continents in the
last six months.
In
the past few days, we have concluded new strategic partnerships with China and
Qatar. We
are negotiating free trade pacts with India, ASEAN, Thailand, Philippines,
Mercosur. To
help solve global problems, we are pursuing variable geometry— different
coalitions for different issues, based on values and interests.
On
Ukraine, we are a core member of the Coalition of the Willing and one of the
largest per-capita contributors to its defense and security. On
Arctic sovereignty, we stand firmly with Greenland and Denmark and fully
support their unique right to determine Greenland’s future. Our commitment to
Article 5 is unwavering.
We
are working with our NATO allies (including the Nordic Baltic to further secure
the alliance’s northern and western flanks, including through Canada’s
unprecedented investments in over-the-horizon radar, submarines, aircraft, and
boots on the ground. Canada strongly opposes tariffs over Greenland and calls
for focused talks to achieve shared objectives of security and prosperity for
the Arctic.
On
plurilateral trade, we are championing efforts to build a bridge between the
Trans-Pacific Partnership and the European Union, creating a new trading block
of 1.5 billion people. On
critical minerals, we are forming buyer’s clubs anchored in the G7 so that the
world can diversify away from concentrated supply. On
AI, we are cooperating with like-minded democracies to ensure we will not
ultimately be forced to choose between hegemons and hyper-scalers.
This
is not naive multilateralism. Nor is it relying on diminished institutions. It
is building the coalitions that work, issue by issue, with partners who share
enough common ground to act together. In some cases, this will be the vast
majority of nations. And
it is creating a dense web of connections across trade, investment, culture on
which we can draw for future challenges and opportunities.
Middle
powers must act together because if you are not at the table, you are on the
menu. Great
powers can afford to go it alone. They have the market size, the military
capacity, the leverage to dictate terms. Middle powers do not. But when we only
negotiate bilaterally with a hegemon, we negotiate from weakness. We accept
what is offered. We compete with each other to be the most accommodating. This
is not sovereignty. It is the performance of sovereignty while accepting
subordination.
In
a world of great power rivalry, the countries in between have a choice: to
compete with each other for favor or to combine to create a third path with
impact. We
should not allow the rise of hard power to blind us to the fact that the power
of legitimacy, integrity, and rules will remain strong — if we choose to wield
it together. Which
brings me back to Havel. What
would it mean for middle powers to “live in truth”?
It
means naming reality. Stop invoking the “rules-based international order” as
though it still functions as advertised. Call the system what it is: a period
of intensifying great power rivalry, where the most powerful pursue their
interests using economic integration as a weapon of coercion.
It
means acting consistently. Apply the same standards to allies and rivals. When
middle powers criticize economic intimidation from one direction but stay
silent when it comes from another, we are keeping the sign in the window. It
means building what we claim to believe in. Rather than waiting for the old
order to be restored, create institutions and agreements that function as
described.
And
it means reducing the leverage that enables coercion. Building a strong
domestic economy should always be every government’s priority. Diversification
internationally is not just economic prudence; it is the material foundation
for honest foreign policy. Countries earn the right to principled stands by
reducing their vulnerability to retaliation.
Canada
has what the world wants. We are an energy superpower. We hold vast reserves of
critical minerals. We have the most educated population in the world. Our
pension funds are amongst the world’s largest and most sophisticated investors.
We have capital, talent, and a government with the immense fiscal capacity to
act decisively. And
we have the values to which many others aspire.
Canada
is a pluralistic society that works. Our public square is loud, diverse, and
free. Canadians remain committed to sustainability. We
are a stable, reliable partner—in a world that is anything but—a partner that
builds and values relationships for the long term. Canada
has something else: a recognition of what is happening and a determination to
act accordingly.
We
understand that this rupture calls for more than adaptation. It calls for
honesty about the world as it is. We
are taking the sign out of the window. The
old order is not coming back. We should not mourn it. Nostalgia is not a
strategy. But
from the fracture, we can build something better, stronger, and more just.
This
is the task of the middle powers, who have the most to lose from a world of
fortresses and the most to gain from a world of genuine cooperation. The
powerful have their power. But we have something too – the capacity to stop
pretending, to name reality, to build our strength at home, and to act
together. That
is Canada’s path. We choose it openly and confidently. And
it is a path wide open to any country willing to take it with us."
Davos, Switzerland, January 20, 2026