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South Korean President Lee Jae-myung at the conclusion of the Asia Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea, on 1 November 2025 (Daniel Ceng/Anadolu via Getty Images)
Carney’s Davos call for middle-power unity fell on willing ears but unwilling governments.
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Middle powers talk big – and act smallMiddle powers talk big – and act small
US President Donald Trump’s favourite word (Opens in new window) in the dictionary – “tariff” – had fallen out of the headlines for much of 2026. The US Supreme Court quashed (Opens in new window) the administration’s use of “emergency tariffs” in February and the Iran war soon seized the world’s attention.
Now, tariffs are back – and middle powers are still going it alone.
At least 60 economies are being threatened (Opens in new window) with new tariffs under Section 301 of the Trade Act of 1974 for purportedly failing to tackle forced labour. Another 16 economies are being investigated (Opens in new window) for “structural excess capacity and production in manufacturing sectors”. The prospect of further economic pain won’t be appreciated by America’s trading partners at a time when energy and food security shocks resulting from the war against Iran and the closure of the Strait of Hormuz have intensified inflationary pressures.
And yet, the idea that middle powers will decide to “act together” in response to these tariffs, as urged (Opens in new window) by Canadian Prime Minister Mark Carney in January, still seems aspirational at best. Instead, middle powers are likely to respond the way they did to the first wave of “Liberation Day” tariffs in April 2025 – with a hodgepodge of tactics.
Even at a moment of apparent middle-power cooperation, Australia needed to manage a point of great power leverage.
South Korea’s anti-tariff strategy is a good example of how middle powers have tended to respond to Trump’s mercurial policymaking. Seoul eschewed any grand diplomatic vision, pursuing more nimble strategies. When Seoul did conclude a trade deal in 2025, President Lee Jae Myung pursued transactional “give and get” negotiations, acceding to many US demands but also winning (Opens in new window) something it has long sought (Opens in new window) in return: US nuclear-powered submarine technology. South Korea also sought to flatter Trump, presenting (Opens in new window) him with an extravagant golden crown, while carefully managing sentiment at home. Seoul had earlier brought forward negotiations over cost-sharing for US Forces Korea ahead of the 2024 November presidential election – signing (Opens in new window) a new deal that pre-empted and neutralised what would have been a major source of leverage for the future Trump administration.
Will we see a different approach this time? Looking at how middle powers have responded to the Iran war energy crisis, it seems unlikely.
In Australia, the closure of the Strait of Hormuz sparked panic (Opens in new window) due to the country’s limited fuel reserves. Leaders responded with a flurry of bilateral dealmaking to secure fuel supply, travelling to Singapore (Opens in new window), South Korea (Opens in new window), Malaysia and Brunei (Opens in new window), and hosting Japanese Prime Minister Sanae Takaichi in Canberra (Opens in new window). Australia and Japan also agreed (Opens in new window) to work together in response to economic coercion, seemingly prompted by Beijing’s recent imposition (Opens in new window) of export restrictions on Tokyo.
But an irony of that agreement was that the Australian government had also asked Beijing for help on energy security. Seeking to ensure that jet fuel shipments would continue to flow, Prime Minister Anthony Albanese contacted (Opens in new window) China’s Premier Li Qiang. It meant that even at a moment of apparent middle-power cooperation, Australia needed to manage a point of great power leverage – coming after Australia’s energy insecurity was exposed because of a war led by its own great power ally.
The price at the pump (engin akyurt/Unsplash)
In the aftermath of Carney’s Davos speech, the chorus urging closer middle-power cooperation and coalition-building has grown loud. Australian Treasurer Jim Chalmers said (Opens in new window) the speech was “widely shared and discussed in our government”. Finnish President Alexander Stubb urged middle powers to “tilt the global order (Opens in new window)” by supporting trade governance institutions such as the World Trade Organisation. But in practice, middle powers haven’t backed up their bark with bite.
In response to US tariffs, we haven’t so far seen the EU deploy its “bazooka (Opens in new window)” Anti-Coercion Instrument, nor has the much-anticipated but elusive EU–CPTPP partnership (Opens in new window) come to fruition. Instead, governments have offered the Trump administration tactical concessions, and sometimes competed (Opens in new window) with each other to secure the best deal. Middle powers haven’t gone all-in on multilateralism and coalition-building under the pressure of the Iran war energy crisis, either.
Australia, South Korea and many other middle powers have become rich by embedding themselves in the global economy, and they do not benefit from the deterioration of the international order. In the long-term, maintaining economic openness, reinforcing existing rules, and ensuring that the great powers don’t have a free hand in setting new rules are worthy objectives. Working in middle-power coalitions may be part of that.
But, even at a moment when the global economy is under strain, middle powers aren’t leading by example. They are largely falling back on bilateral dealmaking and bespoke unilateral tactics. Those arguing (Opens in new window) for grand middle-power coalitions are likely to be disappointed.
About the authors
Alexander Hynd
Alexander M. Hynd is a Lecturer at the Asia Institute and Deputy Director of the Master of International Relations at the University of Melbourne.
Max Broad
Max Broad is a Research Associate at the Lowy Institute, supporting the Executive Director across research, publications, and events. His background spans national security policy, strategic studies, and Southeast Asian politics.
Minsun Hong
Minsun Hong is a visiting researcher at the University of Melbourne’s Asia Institute.
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