“A rupture in the world order.”

Canadian Prime Minister Mark Carney did not mince his words in his recent special address at the World Economic Forum in Davos, Switzerland. He noted that we now live in a world where “the large, main power … is submitted to no limits, no constraints.” This is a frightening prospect for the vast majority of the world’s countries, which seek stability not only in their relationships with the United States but also with China. Yet even as the United States has become less predictable as an ally, supplier, and consumer market under U.S. President Donald Trump, shifting to China is not a tenable alternative for most counties.

“A rupture in the world order.”

Canadian Prime Minister Mark Carney did not mince his words in his recent special address at the World Economic Forum in Davos, Switzerland. He noted that we now live in a world where “the large, main power … is submitted to no limits, no constraints.” This is a frightening prospect for the vast majority of the world’s countries, which seek stability not only in their relationships with the United States but also with China. Yet even as the United States has become less predictable as an ally, supplier, and consumer market under U.S. President Donald Trump, shifting to China is not a tenable alternative for most counties.

However, as Carney suggested, not all countries are “powerless” in this situation. This is especially true for middle powers—countries that lack the dominance of great powers but possess distinctive industrial, resource, or diplomatic capabilities. Carney called for middle powers to join forces to counter growing global volatility, but many middle powers have already taken a different route: acting alone as “niche superpowers.”

Niche superpowers are countries that assert their global importance through dominance of specific industry verticals. In other words, they leverage unique capabilities and resources that great powers lack and desire.

Middle powers need this outsized strength as a bulwark against a growing litany of pressures from the Trump administration—particularly to negotiate tariff reductions and to ensure military support when needed. These assurances were once largely secured through multilateral institutions such as the World Trade Organization or NATO. Today, however, they are best secured bilaterally, rather than assumed as part of a collective bloc.

The most obvious, and extreme, example is Taiwan and its “silicon shield,” a term coined by former Taiwanese President Tsai Ing-wen in 2021 to describe the country’s unparalleled role in advanced semiconductor production. Though Taiwan faces a uniquely acute superpower threat (read: China), it also produces 90 percent of the world’s advanced chips. Semiconductors underpin nearly every facet of modern life—from consumer electronics and automobiles to medical devices, digital payments, cloud computing, and telecommunications—and even a brief disruption would reverberate across the global economy.

Because neither China nor the United States can currently build the most advanced semiconductors domestically at scale, the hope is that neither would risk jeopardizing its access to them—in theory, insulating Taiwan from Chinese aggression and guaranteeing U.S. intervention should that fail.

But Taiwan is not the only niche superpower.

Finland, for instance, is the global leader in icebreaker construction. Thanks to its northern geography and advanced engineering capabilities, Finland designs more than 80 percent and produces more than 60 percent of the world’s icebreakers. As the Arctic becomes more accessible, countries with strong icebreaker fleets will shape who trades, extracts resources, and governs in the far north: China, Russia, or the United States.

Similarly, South Korea dominates high-tech shipbuilding. A single Korean shipyard in Ulsan produces more ships annually than the entire U.S. commercial and naval shipbuilding industry combined, the result of decades of sustained industrial policy. Korean shipbuilders count both China and the United States as key markets and, in 2025, had record sales of high-tech ship engines to China.

What once may have been seen as endearing happenstances among allies, these specialized national capabilities are now actively being used as tools of economic statecraft.

In response to Trump’s tariffs imposed last year, these countries leveraged their unique capabilities to strengthen economic ties with the United States. Finland secured a $6.1 billion deal to build 11 icebreakers for the United States. South Korea, taking a rather unsubtle approach, agreed to launch a $150 billion “Make American Shipbuilding Great Again” (MASGA) fund to revitalize the U.S. shipbuilding industry, as part of a deal that would lower U.S. tariffs. Meanwhile, as part of its own trade deal, Taiwan committed to provide up to $250 billion in credit to expand its chip-building capacity in the United States.

These developed economies have used their niche superpowers to shape their relationships with the United States on a bilateral basis, rather than through multilateral frameworks. Finland negotiated outside of the European Union, while South Korea and Taiwan did so beyond regional trading arrangements.

Once reliant on trade agreements and collective security, middle powers’ positions have become more precarious as the Trump administration has imposed tariffs on individual countries and upended existing security groupings. Middle powers, including Canada after being threatened with 100 percent tariffs following Carney’s speech in Davos, must now negotiate on their own behalf. Without something concrete to offer, there is little keeping the terms of their existing trade and security arrangements in place.

While Finland, South Korea, and Taiwan leverage their specialized manufacturing capabilities, these strategies are also becoming more common among emerging economies. Brazil and Vietnam, for instance, have made use of their abundance of criticalminerals, coveted by both Beijing and Washington, though they have chosen to leverage their resources in distinct ways.

In recent weeks, Brazil has engaged in negotiations with the United States about extracting and exporting Brazilian minerals, offering immediate, direct access to rare earths in the hopes of becoming an important alternative to the Chinese supply.

Vietnam, however, is laying the groundwork to become an upcoming powerhouse for refining and separation, creating leverage that can be used in future negotiations. Despite their name, rare earths are not that rare; it is refining and separation capabilities that give China its virtual monopoly over the critical resource. After courting Japanese investment into rare-earth exploration and processing in 2012, Hanoi moved to fully ban the export of rare earths to all countries last December. Vietnam’s National Assembly deputy, Trinh Xuan An, was rather explicit about the ban’s security aims, saying, “Given the geopolitical landscape, mastering rare earth management and technology is essential to asserting Vietnam’s autonomy and strength.”

As an emerging middle power, Vietnam understands that, in the long term, having unique capabilities makes it more valuable to the United States and China than the exporting of raw goods or engaging in regional blocs, such as the Association of Southeast Asian Nations. For other emerging economies, this form of economic statecraft offers a path up the global value chain and greater influence in a world where resource value—rather than ideologically driven alliances—is the basis for diplomatic relations.

In Davos, Carney urged middle powers to work together to withstand the growing pressures of U.S.-China competition. Many have already tried to do so: Last September, for example, Germany convened foreign ministers and high-level representatives from eight European and Indo-Pacific middle powers for a discussion about global affairs without the United States—or China, for that matter—present.

That approach may have worked before Trump’s return to office, when international coalitions were more viable and countries were less like to be singled out in great-power rivalry. But it remains to be seen whether it will still work today. For now, “stronger together” diplomacy has succeeded in rebuffing Trump’s claims on Greenland—but triggered threats of new 10 percent tariffs for several European countries. Game theory suggests that each player will soon question when, or how much, others might defect and whether acting alone could yield better terms. Thus, it’s still unclear whether Carney’s vision of a middle-power coalition could actually work.

With the global order in flux, and the United States and China both using their economic and military power to advance their own agendas, each middle power needs to hone its niche. For now, becoming individually indispensable to the United States, China, or both, is their safest bet to navigate today’s world.