At Davos 2026, global leaders, policymakers, and business executives were grappling with how to counter a potential Trumpian trade order defined by protectionism, tariffs, and economic nationalism. With fears of renewed trade wars and disrupted supply chains, discussions at the World Economic Forum focused on preserving multilateralism, stabilising global markets, and safeguarding the future of free trade amid shifting geopolitical realities.
The foreign policy posture adopted by the Trump administration in its second term is marked by adopting a deliberate strategy to counter China’s rise by tearing down the very international order that the US once built. Trump views that the post-1945 global order, associated with the Bretton-Woods system, has progressively restrained the US’ freedom of action while delivering disproportionate benefits to rival powers, particularly China. Therefore, multilateral institutions, alliance obligations, and global trade regimes are no longer viewed as force multipliers, but structural obstacles that compromise the US sovereignty and strategic autonomy. The approach does not represent a return to Cold War style containment or so-called liberal interventionism, but selective and transactional form of engagement aimed at China’s global advance. Trump advisers are now even talking of a “reverse Nixon” where they bring Russia in from the cold and split the Sino-Russian axis.
The precarious state of transatlantic relations was the focus of the 62nd Munich Security Conference that took place from February 13 to 15, 2026 in Munich. It is the world’s biggest annual defence meeting, bringing leaders, security experts and defence industries together. US Secretary of State Marco Rubio led the US delegation to the Munich Security Conference. At the Conference, more than 50 other world leaders were invited. The latest US National Security Strategy called on Europe to “stand on its own feet” and take “primary responsibility for its own defence,” adding to fears that the US is largely unwilling to underpin Europe’s defence.US Secretary of State Marco Rubio, too, as he boarded his plane to Munich told the press that “the old world is gone.” His highly anticipated address at the MSC was regarded as a significant opportunity to articulate the Trump administration’s vision for a future course of action.
Rubio delivered a hardline address at the conference, declaring that the post-Cold War “rules-based order” had become a dangerous illusion and warning that Western nations risk economic and civilisational decline unless they abandon open-border policies, reindustrialise their economies and sharply boost defence capabilities. Speaking in Munich, Rubio criticised climate-driven energy policies in Europe for weakening competitiveness, accused international institutions including the United Nations of failing to stop wars in Ukraine and Gaza, and said Washington under President Donald Trump was prepared to act alone if allies failed to meet security and economic responsibilities, while urging Europe to rapidly rearm against growing threats from Russia and China.
Rubio was clear: the US wasn’t interested in allies clinging to the old status quo. It wanted to forge a new path, ideally alongside Europe, but only if it shared the same values.
German Chancellor Friedrich Merz declared at the forum, “The international order based on rights and rules… no longer exists,”. He further said, “The United States’ claim to leadership has been challenged and possibly lost,”, pointing to what he called Russia’s “violent revisionism” and China’s desire to “be a leader in shaping the world.”
The EU needs to “accept this new reality today” that involves “a battle for spheres of influence” and where “natural resources, technologies and supply chains are becoming bargaining chips in the zero-sum game of the major powers.” “Our biggest priority is to strengthen Europe within NATO,” he said, vowing to “invest hundreds of billions of euros [into the military] over the coming years” and to continue to support Kiev in its conflict with Moscow.
French President Emmanuel Macron echoed the message, stressing that “Europe has to become a geopolitical power” and that it has “to accelerate and deliver all the components of a geopolitical power: defence, technologies, and de-risking from all the big powers. “Macron has championed European defence autonomy since proposing a ‘European army’ in November 2018, though his calls have remained largely unanswered.
The question for Germany, along with others in Europe is whether traditional alliances with the US, in NATO and the EU can suffice, or whether they should be diversifying into ad-hoc coalitions alongside other like-minded nations such as Australia, Canada and Japan? Trump’s new world order has become real, and Europe is having to adjust fast. A glance at the year’s timeline reveals the scale of the disruption the second Trump administration has unleashed across trade, alliances, and the global order with its largest security alliance partner — the EU.
The push back against Trumpian global trade order is to make it clear that global trade cannot be dictated. Canadian Prime Minister Mark Carney spoke clearest about the “rupture” in the old rules-based system at the 56th World Economic Forum Annual Meeting held from January 19–23, 2026, at Davos, Switzerland — and he also gave his fellow world leaders an assignment. Carney suggested as much in Davos, proposing a new coalition of “middle powers” to replace dependence on the US. This is undoubtedly important, but it is only part of the answer. Carney’s vision of this alternative coalition is centred on signing yet more deregulatory, free-market trade deals, replacing one form of globalisation with another.
It should be no surprise that middle powers want to talk about the options available to them. But the blunt reality of international politics is that there is little reason to expect much middle power cooperation, and lots of reasons to expect their options will remain severely constrained by their relations with the great powers. Even Canada cannot get too crosswise with the US, or they risk discovering what the Monroe Doctrine really means. China’s adherence to its mantra of “hiding capabilities and biding time” helped vault it to the top of the international political heap. But it is difficult for any country to make this leap.
Their only realistic strategic option, as Carney suggests, is to band together in defending international law, safeguarding national sovereignty and spearheading international cooperation. As longstanding institutions are shaken to their foundations, middle powers will have to agree on how much of the old order they wish to preserve, and where it is better to clear the rubble
It is time for Western leaders to learn that you cannot beat Trumpian economics with neoliberalism. We need a genuinely democratic form of economics. This means building systems where public investment, democratic accountability and economic sovereignty take precedence over corporate power and speculative finance. And that is possible, because in challenging Trump and breaking with US dependence, countries can begin rewriting the rules of the economy.
Countering Trump should not be viewed simply through the lens of escalating tariffs. Limiting access of US corporations to procurement contracts, refusing to cooperate on intellectual property rules, and regulating finance and technology will help countries develop sovereign economic policies that can centre the needs of ordinary citizens. Remarkably, such policies have been explicitly put on the table in discussions over the European Union’s so-called “trade bazooka”, threatened over Greenland.
In the face of Trump’s war on Iran which signals a disturbing foreign policy bent on foreign conquest, we are also witnessing unravelling of the US alliance system that has dominated the past decades and how a lingering imperial mindset prevents adjustment to new realities. The war against Iran is not only undermining the stability of the U.S. empire and its network of alliances but in effect the US empire is collapsing and pulling down the entire US-led security architecture. Wars impose large and lasting economic costs. If the war against Iran escalates into a major regional conflict, its economic burden on countries like Bangladesh could be catastrophic especially when the world faces the biggest energy supply disruption in history as Iran blockades the Strait of Hormuz.
Countries that have championed the free world order from 1945, and further reenergising since the mid-1990s, should maintain their commitment to it. That does not mean taking President Trump’s language about unwilling allies or demands for annexation without resistance.
The most urgent task for middle powers like Canada is to reduce their vulnerability to coercion by the US, which have increasingly weaponised economic policy by diversifying their trade relationships and supply chains,
In a world where great powers are using economic and military leverage as tools of coercion, middle powers that fail to act collectively will find themselves increasingly exposed to threats and intimidation — or worse. The problem is that middle powers are too diverse as I mentioned earlier, both in terms of interests and capability. In fact, the category is also arbitrary and remains unclear.
However, all countries have a stake in international order, regardless of their size and political status. Seen within this context, it would be difficult to imagine a manifestation of international order outside the existing United Nations framework, with all its weaknesses and problems. The UN Charter has steered the world through numerous crises in the past. A new and modern interpretation of the document will help leaders address the growing number of existential global challenges that they now face. Therefore, re-energising the United Nations (UN) is of utmost importance and that requires a combination of structural reform, modernisation, and a renewed commitment to multilateralism by member states.
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