A Faustian bargain is an agreement in which someone agrees to do something bad or dishonest in return for money, success or power. It is usually described as a ‘deal with the devil’.

It’s interesting that Canadian Prime Minister Mark Carney used a quote from Faust, the character in the Goethe opera whose story, a parable of warning, provided society with the inspiration for the adjective.

Speaking to a packed European Parliament on September 17th, Carney said in the original German: “Nur der verdient sich Freiheit wie das Leben, der täglich sie erobern muß.”

“Freedom and life must be earned every single day.”

That quote draws from the end of the work, where Faust, moving beyond the selfishness that drove him into a pact with the devil Mephistopheles, ultimately attains redemption.

Carney’s choice of words is open to many interpretations, but the core of his speech is clear. In it, he announced a seismic strategic shift for Canada, which is to become the European Union’s first associate member.

This move has been on the cards for months, driven in greater part by the US Trump administration’s behaviour towards their northern neighbour. Trump’s actions: 25% tariffs on Canadian goods outside USMCA/CUSMA, tariffs on aluminium and the automotive industries. The collapse of recent trade negotiations over Canada’s culture and the use of the French language alone would have been a challenge for any Canadian leader to put up with.

However, perhaps the more significant is Trump’s words. So much of international relations is built on perceptions between countries, societies and cultures. Canadian and American culture has long been close: an enormous border, shared language and, unusually, Canadians and Americans have a love for many of the same sports, particularly ice hockey. It would surely take a lot to break that bond.

That’s what Trump gave. Scarcely a month has gone by in his second term without an insult to his northern neighbours. Trump has repeatedly demanded that Canada become a 51st state; others in his administration have called for actual vassalisation. He has released AI-generated maps with Canada painted in the US flag, called Prime Minister Carney ‘Governor’, described the US-Canada border as an “artificially drawn line”, stated that “Canada only works as a state [of the US]” and demanded say over Canada’s foreign and economic policy.

The level of anger that this caused in Canada cannot be underestimated. Carney rode the anti-Trump wave into office as ordinary Canadians started a mass boycott of US goods that continues to this day. Apps such as ‘Buy Beaver’, ‘Maple Scan’ and ‘BuyCAN’ help Canadian consumers scan barcodes of goods to ensure they’re not buying American products.

One wonders how much the reference to Faust in Carney’s speech is deliberate. The idea of freedom requiring constant effort isn’t unique to Goethe, but the pairing with the Faustian narrative of redemption following a deal with the devil is a literary twist that is difficult to ignore.

For a deal with the devil is what Trump is demanding, a deal, as Carney is often to point out, not written in ink but rather pencil.

It is no surprise then that Canada is pivoting away from its decades-old relationship with the US and looking to Europe. Carney spoke highly of the potential of this new relationship: “Europe brings market power. Research depth. Advanced manufacturing. The ability to set standards that the world frequently adopts. A defence industrial base being rebuilt at speed.”

He added: “Canada brings energy at huge scale and in every form the transition requires. One of the world’s largest endowments of critical minerals. Deep capabilities in space, AI and quantum. Amongst the strongest banking systems in the world, and the most expert pension capital. Unique Arctic geography, and privileged access to both Atlantic and Pacific networks.”

This is being cemented already. Carney praised the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and Canada’s privileged position as the first non-European member of SAFE, the EU’s extensive rearmament programme.

He set out plainly what this new relationship entails: cooperation in critical minerals, defence industrial capacity, AI, energy security, space technology and integrated payment systems. He called for movement towards easier trade in services and non-agricultural products and cross-border cultural and educational exchanges, including freedom of movement for young citizens.

He also set out what he isn’t seeking: “I am not proposing a third bloc in order to become a great-power rival – only with better manners.”

“We do not seek power to dominate others. On the contrary, we are pursuing resilience so that no one can control our open markets, impair our sovereignty, threaten our territorial integrity, or undermine our freedoms, our democracies, our rule of law.”

Compare this with what the US offered, or, more accurately, demanded: control over language spoken in Canada, control over economic foreign policy, one-sided trade demands and capricious tariffs. All of which are aimed at the erosion of Canada’s sovereignty to what can only be described now as an aggressive neighbour. After Carney’s speech, Trump lashed out in typical fashion, threatening to impose “very serious” tariffs. Hardly a way to make friends and influence people.

This brings to light the key crack that caused the rift. Values. That word comes up seven times in Carney’s speech. Values are often considered ‘soft’ by proponents of realist theories in geopolitics. They tend to concentrate on hard power: GDP, military capability, industrial capacity. However, values are key. The core of the EU, NATO and the Canada/US relationship were all built on shared values.

There is no respect for these in Trump’s administration. Where is the rule of law when masked ICE agents detain citizens for days or weeks? Where is human dignity when it is mocked by the highest officials? Where is democracy when candidates for high office cannot bring themselves to say whether or not the 2020 election was won or lost by the incumbent president? Where is individual freedom when freedom of speech on college campuses, in town halls and even in the press pool at the White House is curtailed?

When you look through the lens of values, it is not Canada that has broken with the US. It is the US who has broken with Canada. Like an old lover who changes into someone you no longer recognise and come to realise, no longer love.

Not satisfied with democratic backsliding at home, this US administration seeks to export it, as they did to Canada during the trade negotiations, as they’re doing to Europe through financial support to organisations aligned with their oligarchic ideology.

It is no surprise, then, that the central thrust of the proposal revolved around strategic autonomy, ensuring that Canada and the EU stand together and have the strength to resist this imposition. This is Carney’s ‘Middle Powers’ speech at Davos now writ in active policy.

All this does raise a question. Can this new alliance, if it grows into what Carney envisions: “a transatlantic forest under which our citizens can flourish as free people on free ground”, be anything other than the great power he explicitly says he isn’t calling for?

If this alliance is successful, it seems likely that Britain will want in on a future ‘associate membership’; polling increasingly shows the mood of the British public moving against Brexit. What about the other ‘middle power democracies’: Australia, New Zealand, South Korea or Japan? If all came together with the EU, cooperating in trade, free movement, financial technology, AI and defence, then could it be described as anything other than a great power? I find it doubtful.

After all, in our New Cold War, post-Westphalian world, can such an alliance survive without great-power status? Watch this space, but it’d be fair to be sceptical.

What has become clear is that both Canada and the EU’s determination in achieving strategic autonomy is real. It has gone beyond words now and into coherent action. There is a lot of work to be done, both in the EU, especially around the implementing of key reforms recommended by former Italian PM Mario Draghi, and in Canada on diversification away from the US. The first steps have been taken and a middle- to long-term plan is becoming clear to see.

The Trump administration may be unhappy, they may impose further tariffs, ‘rename’ more bodies of water and take to Truth Social to vent their anger but, in a way, this is what the Trump administration claimed to want: allies taking matters into their own hands. The fact that they didn’t see the benefits these allies brought to the US that they now stand to lose is ironic. The adage “be careful what you wish for” applies here.