Minghan Zhu, a BGD Young Voice 2026, argues that middle powers can strengthen their position amid intensifying great-power competition by acting together and building greater economic leverage. Drawing on recent trade tensions and China’s experience, he explores how new forms of cooperation can help middle powers defend their interests while reducing strategic dependencies.
Against the backdrop of zero-sum politics defined by trade conflicts and geopolitical uncertainty, Canadian Prime Minister Mark Carney used his speech in Davos this January to make one core point: middle powers need to come together and stand up. Less than a year after coming into office, the Prime Minister used the stage to deliver a warning and rally his allies.
For middle powers to resist and defend their own interests, two things are key: multilateral collaboration and preparation for external pressure by building up leverage. Middle powers can become more powerful by acting together, in line with Carney's speech in Davos. In a world of increasing multidimensional great-power competition, spanning trade, technology, defense and political influence, these countries must build new alliances for the new era and work out a set of robust policies across these dimensions.
Just some months later, Carney’s speech was put to a serious test. Renewed U.S.-Canada trade talks collapsed in August, with both sides accusing each other of making last-minute changes to the terms on the table. The Canadian side later revealed that the U.S. administration had sought provisions affecting Canada's ability to negotiate its own trade agreements, as well as its French-language protections—an especially sensitive issue in Canada. What followed was a series of tit-for-tat tariffs on various goods, with Carney advocating for "dollar-for-dollar" tariffs in response.
What this conflict shows is that some things are more important than money, and that especially for countries aspiring to be a serious geopolitical player, sovereignty is not negotiable, even at the cost of great economic pain. Polls in Canada suggest that 85% of Canadians support their Prime Minister’s counter-tariff measures . In fact, the first U.S. tariff announcements have coincided with a rise in the polls for Carney’s Liberal Party ahead of the election. Nonetheless, tariffs and trade wars hit these countries hard, and Deloitte forecasts a significant economic and trade slowdown in Canada following the recent tariffs.
In order for middle powers to exercise their influence, it is perhaps worthwhile to look at another country that has faced similar challenges: China, whose experience offers useful lessons in how to resist economic pressure. While it must be emphasized that China wields more influence than middle powers and holds more leverage in international relations, it can nonetheless offer valuable lessons in how they could respond if they unite and put their differences aside.
Trump adopted increasingly confrontational rhetoric toward China during the 2016 presidential election and presented himself as a trade hawk. Once in power, his administration imposed a series of tariffs and sanctions between 2018 and 2019. Ultimately, both countries signed the so-called First Phase of a future trade agreement in January 2020. With China holding less leverage than today, it had to make concessions, agreeing to spend $17 billion on U.S. agricultural products annually. These events left China´s leadership wary of what might happen in the future, especially should Trump return to power.
In a move to prepare for a second Trump administration and to build up leverage, China has sought to diversify its trade dependence on the U.S. by reducing the share of its U.S. exports and finding new markets. Meanwhile, China also attempted to find alternatives for its crucial U.S. imports, such as soybeans, from Brazil and Argentina. It has also crafted a series of countermeasures against a potential trade escalation going beyond tariffs, such as export controls on critical rare earth minerals. Ultimately, after a series of tit-for-tat tariffs so high they amounted to a trade embargo, both sides engaged in trade de-escalation, realizing that economic interdependency puts limits on just how much one can weaponize relations without hurting the domestic economy.
Middle powers wield substantial economic and diplomatic influence but lack the scale to dictate terms independently to the world's largest powers. Countries such as Canada, Australia, the UK and Japan, as well as blocs such as the European Union, therefore, face greater constraints in withstanding such pressure, particularly given their dependencies on the U.S. in areas such as technology and defense. Hence, middle powers often announce the intention for closer cooperation. In practice, however, concrete action often falls short because of differing national interests
The EU's recent sanctions packages against Russia were long vetoed by Hungary on the grounds of its own national energy security. Its latest arms procurement scheme, SAFE, was meant to pool demand and create a joint European defense market, yet countries continue to direct most of their procurement into local companies. Last but not least, the EU pursued its own trade deal with the U.S. without liberalizing relations with other middle powers, while also recently refusing to mediate between the U.S. and Canada.
In light of renewed calls for closer cooperation, recent discussions about Canada becoming an associate member of the EU point in the right direction. Such an arrangement could potentially provide greater access to the single market, participation in joint defense projects, and closer cooperation on areas such as AI and cyber resilience. Moreover, facing aggressive trade policies, economic uncertainty and geopolitical threats, middle powers must define a clear set of measures that raise the cost of escalation for great powers by identifying their vulnerabilities. In the ongoing trade conflict, Canada may have already found a potential source of leverage: its potash exports to the U.S., which is crucial for America’s farming industry. Whether Canada, and by extension other middle powers, can translate their advantage into real leverage will depend on these countries´ readiness to act upon their declared intentions.
Middle powers must make clear that they do not wish for conflict. But they must also be prepared to act together where their interests align—and that requires serious preparation. While great powers possess sufficient market, military and economic might to act alone, middle powers negotiating individually with a hegemon do so from a position of weakness, which makes the collective approach crucial. To quote the Canadian Prime Minister: “Middle powers must act together, because if we're not at the table, we're on the menu.”
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