Mark Carney swept to power on a backlash to President Trump’s talk of making Canada the 51st state, which many Americans took for mere shtick. But for the new prime minister, reading intelligence reports detailing the gravity of the crisis, it was a breaking point.
In private phone conversations with Carney’s predecessor, Justin Trudeau, Trump had threatened to scrap the 1908 agreement delineating their shared border. “I tear that up and your whole country unravels,” Trump told Trudeau in one call, according to two people familiar with the matter.
Over dinner at Mar-a-Lago, Trudeau’s envoys tried to dissuade Trump from absorbing their country. When one Trump aide pointed out Canada’s 41 million people would lean Democrat, the president came up with a neat solution: just split the northern neighbor into two states, one red, the other blue.
Now, as Carney took charge in early 2025, he commissioned a sensitive review that he would discuss one-on-one with his closest aides, in his office or aboard the jet officially callsigned CanForce 1: How dependent was Canada on one particular country for its data storage, military hardware, payments processing and even food?
It was Carney’s first crack at a riddle that would come to bedevil governments on both sides of the Atlantic. What to do when your closest ally turns into a threat?
His prescription in large part would lay in Europe, where Carney, a former Bank of England governor, had made his past and now saw Canada’s future. The Canadian banker who never before held elected office would emerge as an unexpected central figure in a high-stakes project to reshape the economic and military community known as the West.
Since World War II the alliance had worked like a wheel: The U.S. as the indispensable hub and the rest as spokes. Carney argued that Canada and Europe would have to build an alternative model, a “dense web of connections” that wouldn’t overly depend on any single country. His approach contrasted to that of another influential leader, NATO Secretary-General Mark Rutte, who was encouraging Europe to double down on its relationship with Trump—whatever it took to keep America from abandoning the alliance.
They represented opposing poles of a years-old debate coming to a boil in Europe, with the U.K., like Rutte, betting heavily on its special relationship with Washington. France, conversely, was eager to build up Europe’s own sovereign defense base and technology, from quantum computing to AI systems held outside America. Carney would try to sway the outcome, without provoking the superpower that imports three-quarters of Canada’s goods.
In effect, a push to make Canada America’s 51st state had lighted a fuse of unintended consequences that would play out far beyond North America, as overseas allies asked themselves whether the U.S.-led alliance could truly last.
The Wall Street Journal spoke to heads of government, their ministers and top aides to reconstruct the closed-door meetings where the alliance began to splinter. The Journal was able to review detailed notes taken by some participants. This is the second in a two-part series revealing the contents of deliberations among America’s allies over how they might salvage their alliance—or prepare for its unraveling.
White House spokeswoman Olivia Wales said, “President Trump believes Canada and all other NATO countries must take greater responsibility for their own defense. They should have been there for the United States when we were in the middle of the successful Operation Epic Fury” against Iran. “President Trump will not allow our country to be taken advantage of,” she added.
On Thursday, the president posted an article about Canada’s economic difficulties on Truth Social, annotated with two words: “51st State!”
Unlikely radical
The first prime minister born in Canada’s Northwest Territories, Carney was an unlikely radical, a picture of the global elite Trump campaigned against. An alumnus of Harvard, Oxford and Goldman Sachs who became the first foreigner to run the Bank of England, he kept two cellphones, even as prime minister: one Canadian and another with a British number, and list of contacts, from his time in London.
Steering the British pound after the European debt crisis delivered a lasting lesson in how a global economy engineered for efficiency had grown dangerously dependent on a single fragile point: America and its greenback. As bank governor, he proposed a “synthetic hegemonic currency” that middle-sized economies could use as a dollar alternative. The IMF’s chief economist in Washington called the idea “intriguing,” but “improbable,” saying the U.S. dollar’s strength flowed from America’s “institutions, the rule of law.”
Carney’s brainchild barely registered, in part because he floated it the same week of August 2019 that news broke of another outrageous proposal that at first seemed like a joke: Trump wanted to buy Greenland.
And yet now, as Canada’s leader, Carney would make an expanded version of the same case to America’s closest allies—that the entire global security system was too dependent on Uncle Sam. His own staff struggled to keep up as he texted European leaders he’d known from the finance world, like Rothschild banker Emmanuel Macron, now France’s president; onetime chairman of BlackRock’s German subsidiary, Friedrich Merz, now German chancellor; and the European Investment Bank’s Alexander Stubb, now Finland’s president.
Just two days after assuming office, Carney traveled not to Washington—a conventional first stop for a new Canadian prime minister—but to France. Standing alongside Macron at Paris’s Élysée Palace, he called Canada “the most European of non-European countries.”
Over a private lunch, the two leaders animatedly exchanged ideas on how France and Canada could help each other dial down their reliance on America. Canada had the critical minerals needed by France, whose state-backed tech firms were taking early steps into the U.S.-dominated spheres of AI and quantum computing.
French diplomats joked that since Canada and Denmark share a land border on an uninhabited Arctic island off Greenland, that could make the North American country a legitimate candidate to gain fast-track membership in the EU. Carney laughed.
Special relationships
The reception was more restrained in London, Carney’s next stop. Prime Minister Keir Starmer’s administration had been startled when Trudeau’s government discreetly asked British intelligence chiefs to start discussing how they might band together if the U.S. left Five Eyes, the U.S.-led intelligence-sharing alliance. MI6 turned them down, as the vast majority of intelligence that flowed through that club came from Washington. The idea never gained traction, Canadian officials said, and Carney didn’t try to resurface it.
Starmer was more aligned with Rutte’s conviction that they could salvage the Western alliance by flattering Trump, and he had avoided publicly mentioning the president’s campaign to annex a British Commonwealth nation.
One gesture of support came from King Charles III, Canada’s head of state, who symbolically planted a red maple tree in Buckingham Palace’s garden. When the king made plans to visit Canada, Starmer was nervous about provoking the U.S. president, according to officials involved in those discussions.
Like Carney, Starmer was undertaking a strategic review, reassessing how Britain could defend its interest in a changing world. But by the time Carney visited, the report, now drafted, broached a question Starmer’s office found provocative: What if America abandoned their “special relationship?“
Fiona Hill, Trump’s top Russia adviser in his first term and now a co-author of the British report, was skeptical about Washington’s staying power. She shared her thoughts with Carney, who had served with her on Harvard’s Board of Overseers. Trump, argued Hill, was America’s answer to Soviet leader Mikhail Gorbachev, weakening a superpower he meant to strengthen. She failed to move Starmer’s team, who put the report through months of edits to reaffirm the importance of U.S. ties.
Carney would have to try again to bring Starmer on board in November, when they headed to the G-20 in South Africa. The U.S. was boycotting in protest of what Trump had called “white genocide,” which gave Carney more time with Macron, Finland’s Stubb, and Spain’s Prime Minister Pedro Sanchez, all of whom shared his perspective. Starmer was still cautious, though—the West had to salvage its relationship with America, he told Carney. “We don’t have a relationship to keep!” Carney replied.
In Trump’s first term, Canadian officials maintained a line of communication to the White House through a sometimes-informal network of businessmen and politicians who had the president’s ear. But the cast of characters shifted in the second term, leading to frustration.
When one of Carney’s European counterparts mentioned their difficulties with the personalities in the second administration, two Canadian officials said he responded: “I have to deal with these guys every day.”
One rare constant was Trump’s son-in-law Jared Kushner. Shortly before Carney took power, the Ottawa government was desperate to rebut Trump’s unsupported claims that Canada had become a major source of fentanyl. Asked for advice, Kushner suggested they produce a video that might persuade the president that they were serious about border security, according to the Canadian officials.
Trudeau’s government hired a film crew to capture two Black Hawk helicopters and a sniffer dog on patrol. Instead of placating Trump, it seemed to fuel his interest in revisiting the placement of the border.
Under Carney, Canadian senior officials began reading clinical studies on impulsivity to understand Trump’s psychology, or biographies of his business and media career. They speculated that his bid for Canada was a negotiating tactic aimed at “price discovery.” In other words, propose an outrageous idea and test the market reaction.
Some aides had a different theory, that the whole 51st state idea was Trump’s way of kicking Trudeau as the Canadian leader’s poll numbers were down. But Carney eventually discovered that he, too, had a target on his back. By the end of 2025, the U.S. had imposed steep tariffs on Canada, and trade talks were frozen, with Trump publicly offering a way Canada could avoid tariffs: “You become 51.”
Canadian officials looked for support in Europe. But few leaders spoke out. The EU had its own trade deal with Trump by then, taking the crisis between two NATO allies as background noise.
A single stone thrown from Mar-a-Lago would shatter that false calm.
The Greenland gambit
Katie Miller, wife of Trump’s deputy chief of staff, was dining with the president in January, hours before special forces captured Venezuelan dictator Nicolás Maduro, and noticed Trump was in a ruminative mood.
“I wish I had more time,” Trump said. “If I had more time, I would do Greenland.”
“You do have time,” she reassured him. On Jan. 3, with Maduro now in U.S. custody, she thumbed out a provocative single word tweet: “SOON,” she posted on X, with an American flag covering Greenland.
The intervention, echoed by White House officials, was the equivalent of a fire alarm across Europe. It would test Europe’s patience with Rutte’s strategy of making concessions to Trump and push a critical mass of leaders to see the U.S. as Carney had warned: a country willing to weaponize its dominance over allies.
In Denmark, Prime Minister Mette Frederiksen convened a series of emergency briefings with intelligence chiefs who viewed the overture as serious—not a bluff—and who were identifying the U.S. as a potential military threat: “The possibility of employing military force—even against allies—is no longer ruled out,” a report from the Danish Defense Intelligence concluded.
On Jan. 6, she and Carney joined other leaders in a gilded hall of the Élysée Palace in Paris for a prescheduled meeting of Ukraine’s backers. Before it began, the leaders huddled under the rococo ceiling and chandeliers started urgently discussing Greenland. Trump’s pointmen for Ukraine, Steve Witkoff and Kushner, were in another room, giving Frederiksen time to lobby European counterparts, seeking support for Danish and Greenlandic sovereignty.
“This is not about you or me,” she kept repeating, “this is about European solidarity in a time of crisis.” Carney, on the sidelines, was pitching his ideas of tethering Canada closer to Europe.
Ukrainian President Volodymyr Zelensky, in town to rally military support against Russia, looked exhausted as Witkoff entered and launched into a speech less focused on the battlefield situation or the breakdown in the alliance than the economic opportunities awaiting Ukraine if it made peace with Putin. As he proposed that Zelensky could get a trade deal with America and a reconstruction effort overseen by BlackRock, the world’s largest asset manager, one European aide wrote a note to give her prime minister.
We can no longer rely on America, it said. “All we have is international law.”
That day the White House floated the possibility of using military force to acquire Greenland. France’s defense ministry reached out to the Pentagon for clarification on the administration’s intentions, but didn’t get a clear answer. Diplomats posted to NATO’s arched-glass headquarters in Brussels began grabbing each other in their offices and huddling in regional groupings, according to people close to the talks, discussing whether their alliance was breaking apart. Denmark was already equipping Arctic troops for an unthinkable: a shooting war with America.
Rutte was furiously messaging Trump, trying to save the alliance. Carney, meanwhile, was on CanForce 1—his team preferred to simply call it by the name of its European maker, the Airbus—to China, where he would ink a “new strategic partnership” with Xi Jinping.
In his Beijing hotel suite, Carney watched the news from Greenland play out on the TV and debated with aides whether Trump’s demands would outlast him and become U.S. policy. He was due to make a keynote address at the World Economic Forum in Davos—one day before Trump’s own speech there—and wanted to frame it as a wake-up call. With his team, he workshopped lines they hoped would be like a bucket of ice water, including a slogan Carney had used before: “Nostalgia is not a strategy.”
Carney’s visit to China—the first by a Canadian leader after nearly a decade of testy relations—went smoothly, to the surprise of his advisers. The Chinese had researched how urgently Canada needed non-American buyers for its canola seed, and easily agreed to lower agricultural tariffs in return for Canada welcoming 49,000 Chinese electric cars. “We take the world as it is,” Carney told reporters. “Not as we wish it to be.”
On the way to Switzerland, on a stopover in Doha, he woke at 4 a.m. to write his Davos speech in a single two-hour sitting.
Trump watched from Air Force One as Carney delivered the speech, the Davos crowd rising in rapturous applause for his rallying cry for Western nations to stand up to great powers or “be on the menu.” Canada was “ungrateful,” Trump complained to aides. Carney, without mentioning the U.S., went further than any Western leader in defining a manifesto against Trump’s governing style: “You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination,” he said.
The former Bank of England chief was in his element that evening, filtering through the Swiss mountain resort where he was so well connected that he was on a first-name basis with the Canadian pianist playing Billy Joel’s “Piano Man” at the Hotel Europe’s VIP party, where guests praised his speech.
NATO’s Rutte, meanwhile, was closing in on a rough agreement with Trump, whose upcoming Davos speech was being billed as the moment the alliance could die. The secretary-general was offering a vague plan to avoid an impending trade war. European leaders, led by Macron, were threatening to hit America with a mix of tariffs and other retaliatory moves they’d nicknamed the bazooka. U.S. bond yields were hitting five-year-highs, driving up America’s borrowing costs.
When Rutte stepped past a navy blue NATO flag to meet the president, he faced an entourage of five Trump cabinet members all wearing matching Florsheim dress shoes. The Dutchman inhabited the now-familiar role of empathetic counselor. “We can help,” Rutte said, proposing that NATO could boost security in the Arctic. The president dropped his threat of military force.
But Trump still had choice words for Carney, when he gave his speech that day. “Canada lives because of the United States,” he said. “Remember that, Mark, the next time you make your statements.“
‘Buying time’
The next evening, top EU leader António Costa brought nearly 30 heads of government into the European Council headquarters known as “The Space Egg,“ for what became an emotional, five-hour conversation about the U.S. that some called “therapy night.” A tired EU diplomatic service official called Carney’s National Security Council afterward to say the meeting had been a before-and-after moment in Europe’s relationship with America.
The Europeans made plans to meet again, this time on Feb. 12, in a Belgian castle built by the Knights Templar, for a discussion Costa slated under “a new geoeconomic context.” Arriving leaders knew how sensitive the conversation would be. Each was required to drop their cellphones into a signals-blocking case. They would discuss how they, alongside Canada, were ramping up a daunting campaign to build tech and defense capabilities that wouldn’t be under American control.
Their plan was evolving into a delicate, two-step maneuver. Rutte was leveraging his personal relationship with Trump to keep the U.S. engaged in NATO—for as long as possible. At the same time, the allies were trying to step back from a decades-old dependency on American technology, military power, and trade, without provoking Washington.
“Leaders finally acknowledged an inconvenient truth: The European economy had lost its competitive edge,” said one of the prime ministers in the room, Bulgaria’s Rosen Zhelyazkov. “We recognized that direct confrontation with the U.S. was both unnecessary and counterproductive, the solution required buying time.”
The allies began accelerating investment in space, defense, quantum computing and payments systems—to build cloud networks, data centers and defense systems that could function without U.S. technology. On nearly every count, Europe was far behind.
Elon Musk’s 10,000 Starlink satellites were handling some of Europe’s most sensitive governmental conversations, and data their weapons used in Ukraine. The EU sped up its schedule to launch several hundred European satellites for governments to communicate securely over non-American networks.
Europe was going to have to spend hundreds of billions of dollars replicating systems America traditionally supplied. Carney, in another lunch with Macron at the Élysée Palace and during a jog through London’s Hyde Park with Finland’s Stubb, was discussing how Canada could better integrate into—and augment—those systems. In February, Canada joined a new €150 billion EU defense fund and launched the Sovereign Technology Alliance with Germany, to deepen collaboration on AI security and compute capacity.
Canadian and European officials began to meet more frequently for discussions that would have once included their American counterparts. During preparations for the G-7, officials met in the French city of Toulouse in March, discussing quantum computing, food security and AI between conversations on how Canada would join Europe’s student-exchange program, Erasmus, or its song contest, Eurovision.
Ahead of it, some of Carney’s top national security officials stopped using Starlink.
France meanwhile ordered its 2.5 million civil servants to replace Microsoft Teams and Zoom with Visio, a domestically built videoconference platform. Germany, France, Luxembourg, the Netherlands, and Belgium started rolling out their own homegrown texting services—discouraging civil servants from conducting official business on Meta Platforms’ WhatsApp. German officials complained about the clunkiness of the non-American software they were now expected to use. Germany’s parliament passed an act favoring European suppliers for its defense needs.
“Even if Biden came back it would not be the same,” said Alice Rufo, deputy defense minister of France. “The time of warnings is over. Now is the time to do.”
The Pentagon said it would retaliate if the EU enacted policies to favor domestic arms manufacturers. To smooth things over, Rutte visited the Oval Office in April, bringing papers listing how many billions of dollars in American weaponry Europe was still purchasing. “Maybe you haven’t noticed,” he said, careful not to imply the president didn’t know these facts.
The president threatened he would leave NATO. No, you won’t, Rutte pushed back.
This week, Rutte brings to the NATO summit in Ankara a catchy new slogan: “The Trump Trillion,” his rough estimate for how much more Europe and Canada have spent on defense since the president’s first term.
Carney’s team has been quietly pitching his ideas to the U.K.’s likely next Prime Minister, Andy Burnham, whose chief economic adviser was once Carney’s Bank of England deputy. He is working with Finnish President Stubb on an article, not yet published, on how their countries can navigate a shifting world order.
Over text messages, European security officials recently shared a wry joke about the fissures in the alliance that has become grimly serious: If Trump follows through on threats to leave NATO, given Canada’s geography, the alliance could at least still keep the name, the North Atlantic Treaty Organization.
Header animation by Chase Gaewski. Photography by Brendan Smialowski/AFP/Getty Images, David Kawai/Bloomberg News, Juliette Pavy/Bloomberg News, Guglielmo Mangiapane/Reuters, Annegret Hilse/DPA/Zuma Press
Write to Drew Hinshaw at drew.hinshaw@wsj.com, Joe Parkinson at joe.parkinson@wsj.com and Daniel Michaels at Dan.Michaels@wsj.com
