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What We’re Watching: Davos speeches show strain US-Canada relationship, EU Mercosur deal delayed again, Friendly fire in Ethiopia

​Canada's Prime Minister Mark Carney speaks during the 56th annual World Economic Forum (WEF) meeting in Davos, Switzerland, January 20, 2026.

Canada's Prime Minister Mark Carney speaks during the 56th annual World Economic Forum (WEF) meeting in Davos, Switzerland, January 20, 2026.

REUTERS/Denis Balibouse
By Riley Callanan,
Riley Callanan

Riley is a former writer and reporter for GZERO. When she isn’t writing about global politics, you can find her making GZERO’s crossword puzzles, conducting research on American politics, or persisting in her lifelong quest to learn French. Riley spends her time outside of work grilling, dancing, and wearing many hats (both literally and figuratively).

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Zac Weisz,
Zac Weisz
Zac reports on global affairs, covering everything from battles between judicial branches and political leaders, to conflicts in Africa, Europe, and the Middle East. With the Trump administration keen to alter the world order, though, there’s a heavy emphasis right now on US politics – an area with which he is intimately familiar. Prior to joining GZERO, Zac was a senior national politics correspondent at National Journal, where he covered the 2024 presidential election from its inception to the dramatic finish, as well as major congressional actions during the Biden administration. Prior to journalism, Zac worked as an economic analyst for Oxford Economics, calculating the impact of various tax policies, and of Britain’s exit from the European Union. Born in London, he currently resides in New York City, where you can find him playing football (the original version) or watching it on television while attempting to cook up a storm.
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Alex Kliment
Alex Kliment
Alex wears a few different caps and tips them all regularly. He writes for the GZERO Daily, works as a field correspondent for GZERO's nationally syndicated TV show GZERO WORLD WITH IAN BREMMER, and writes/directs/voices GZERO's award-winning puppet satire show PUPPET REGIME. Prior to joining GZERO, Alex worked as an analyst covering Russia and broader Emerging Markets for Eurasia Group. He has also written for the Financial Times from Washington, DC, and Sao Paulo Brazil. In his spare time, he makes short films and composes scores for long ones. He studied history and Slavic literature at Columbia and has a Master's from Johns Hopkins SAIS. He's a native New Yorker, a long-suffering Mets fan, and owns too many bicycles.
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January 21, 2026
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Canada, US relations get frosty in Davos

Did Canadian Prime Minister Mark Carney deal a major blow to his country’s relationship with the US? During his speech at Davos yesterday, Carney underscored how deeply the US-Canada relationship is fraying. Without naming President Donald Trump, he framed US behavior as part of a broader rupture in the rules-based order (welcome to the G-Zero World, to reference our founder Ian Bremmer). Trump responded during his speech today, chastising Carney and calling Canada “ungrateful.” The public breakup with America’s closest ally comes as once-frigid relations between Canada and China thaw. During a landmark visit to Beijing last week, Carney and Chinese President Xi Jinping agreed to reduce tariffs on some Chinese electric vehicles and Canadian canola products. One thing to watch: As tensions rise between the US and Europe over Greenland, could we see Europe follow Canada’s lead?

In bid to halt insurgents, Ethiopian military commits friendly fire

The Tigray war in Ethiopia ended in 2022, but the East African nation of nearly 112 million people has faced another issue since then: multiple insurgencies in the Amhara and Oromia regions. In a bid to stamp out one of these groups, the Fano, the military launched drone strikes in the Waghemira area last Thursday, but they reportedly ended up hitting and killing 40 fighters on their own side. The Fano had fought alongside government soldiers during the Tigray war, but that alliance faded once the war came to a close. Exacerbating the situation is a long-running border dispute between Ethiopia and Sudan over the Al-Fashaga district, which sits across from Amhara.

EU-Mercosur deal blocked

After 26 years in the works, what’s one last hurdle to the European Union’s largest ever trade deal? The recently approved pact between the Union and Mercosur, a South American trade bloc anchored by Brazil and Argentina, is now headed to the European Court of Justice for a ruling on its legality. The deal, which would integrate markets that are home to nearly 700 million people, was narrowly approved by the EU’s parliament this month, after strong objections from European farmers, particularly in France, who worry about stiff competition from South American producers. The court ruling could take months. In the meantime, lawmakers have voted to hold up the deal.
mark carneytrump davosdavosethiopiaeu-mercosurus-canada relations

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