The Middle Powers Monitor is produced by an automated process. AI agents collect news from dozens of outlets, monitor government sources, and analyze each country across five signal categories. Summaries and overviews are also produced by AI agents. The Monitor draws only on open sources, all of which are cited in each country’s Notes section. For full methodology, see the About page.
Week of January 26, 2026
The Hedger’s Reward Governments that play all sides are being judged not on on competence, and electorates everywhere are cutting them slack. Sanae Takaichi, Japan’s prime minister, said the US-Japan alliance would collapse if Tokyo ignored a Taiwan evacuation. Beijing cancelled 46 airline routes and cut tourist flows worth a fifth of all arrivals. Yet Ms Takaichi’s Liberal Democratic Party polls to win outright control of the lower house in a snap election three months into her premiership. Japanese voters have taken the hit and decided they can live with it—unthinkable a decade ago, when leaders backed down at the first sign of Beijing’s anger. This is true across Asia. Lee Jae-myung, South Korea’s president, visits both Beijing and Tokyo while Samsung’s profits give him cover against American tariff threats. Mr Lee’s 53% approval rating rests not on choosing a side but on showing that democratic hedging, unlike the autocratic whims of his jailed predecessors, comes with safeguards. Prabowo Subianto, Indonesia’s president, tried the same approach and watched $80 billion flee his stock market, because investors saw Mr Subianto hollow out the very institutions—central bank independence, stock-exchange oversight—that make hedging credible rather than reckless. The Americas show the same logic at work. Mark Carney, Canada’s prime minister, refused to withdraw his Davos speech calling for middle-power coalitions against American dominance, yet raced to diversify trade toward South Korea and India—giving ground on substance while proclaiming sovereignty. Claudia Sheinbaum, Mexico’s president, quietly cancelled oil shipments to Cuba after Mr Trump threatened tariffs, sent a tanker to Denmark instead, and called the decision “sovereign”; the peso rose. Luiz Inácio Lula da Silva, Brazil’s president, proposed a Palestinian seat on Washington’s Peace Council while his most market-credible minister announced his departure to run for a governorship, showing the fragility beneath the diplomatic performance. Each played to two audiences: domestic voters who wanted defiance, and Washington which wanted compliance. Success meant keeping those audiences from comparing notes. Chile, preparing for José Antonio Kast’s expected presidency, showed what alignment without pretence looks like: Codelco’s bond sale sold out and a Supreme Court ruling protected the state lithium merger, proving regulatory sovereignty without anti-American theatre. Western Europe reveals what happens when the external performance outruns the domestic foundation. France opened a consulate in Greenland and launched a social-media operation against Russian disinformation while its prime minister used constitutional powers for the third time to pass a budget no parliament would approve. Friedrich Merz, Germany’s Chancellor, urged Europe to speak “the language of power politics” while the Alternative for Germany published a 156-page governing programme for a state where it polls at 40% and the Bundeswehr remained 9% below its recruitment target. Keir Starmer, Britain’s prime minister, secured real wins in Beijing—visa-free travel, £10.9 billion in AstraZeneca investment—only for Mr Trump to call the deals “very dangerous,” showing the cost of hedging between great powers while Labour’s party machine blocked a potential rival from a by-election. Each government projects strength beyond its borders while struggling to hold together the coalitions and public trust needed to govern at home. The assertiveness is real; the foundation beneath it is not. Actions in the Middle East and South Asia reveal a deep anxiety. Saudi Arabia’s Line has been cut from 170 to 2.4 kilometres, a reduction so severe it amounts to cancellation by another name, yet the Public Investment Fund swelled to $930 billion and Riyadh secured $9 billion in Patriot missiles—ambition converted into balance-sheet strength. The United Arab Emirates withdrew from Yemen, put $263 billion in sovereign assets under a single holding company, and launched a “fully sovereign” artificial intelligence system, pulling back from military exposure abroad to build economic leverage at home. India’s free trade deal with the European Union, its defence budget, and its central bank’s gold-buying spree all serve the same impulse: spend to become harder to hurt rather than to project power further. Even eastern Europe’s democracies—Poland buying 102 tons of gold, Estonia spending 5% of gross domestic product on defence, Lithuania creating a “military Schengen”—are building around a threat assessment that leaves little room for the welfare priorities that defined European normality before 2022. Governments everywhere are hedging between great powers, diversifying alliances, hoarding reserves, and performing sovereignty for domestic consumption. But voters and markets no longer judge on ideology or loyalty. They judge on whether a leader’s institutions can bear the weight of the strategy. Where governance is solid, hedging is rewarded—even when it costs. Where institutions crack, no amount of diplomatic performance, sovereign wealth, or nationalist rhetoric can save the act. The world has not become multipolar so much as multi-fragile, and the leaders who thrive are those who make fragility look like a choice.Regions
Frontline and Eastern Europe
Estonia, Lithuania, and Latvia created a military “Schengen zone” this week, allowing their troops to move freely across shared borders.
Western Europe
France, Germany, and Poland are each independently pursuing greater independence from US influence through different strategies.
Asia-Pacific
Taiwan’s TSMC and Samsung posted record profits this week as AI demand surges, with Nvidia becoming TSMC’s top customer and Samsung’s operating profit tripling.
Near East and South Asia
Turkey is positioning itself as a mediator, Saudi Arabia is balancing between the US and Iran, and the UAE has declared neutrality as Middle Eastern powers pursue separate strategies amid US-Iran tensions.
The Americas
Trump’s administration tested allies across the Americas, with Canada, Mexico, Brazil, and Chile each responding differently.