Britain and Canada just merged their defence banks to counter Trump

Britain and Canada just merged their defence banks.

Here's what that means. Both countries had built their own system for lending allies cheap money to pay for weapons and troops. Now they're folding them into one.

Andy Burnham, Britain's Prime Minister, and Mark Carney, Canada's Prime Minister, met for the first time three days ago, in Liverpool. That's where they agreed to do it.

A senior Canadian government official says Ottawa is confident a full deal is coming.

So who's actually backing this thing?

Canada's version is called the Defence, Security and Resilience Bank. Mark Carney built it. Isabelle Hudon, who runs Canada's Business Development Bank, is negotiating it. Eight other countries have joined, including Latvia, Luxembourg, Greece, Belgium and Ukraine.

But here's the catch. Not one other G7 country had joined. Until now.

Britain's version is called the Multilateral Defence Mechanism. The Netherlands, Finland and Poland are already in it. Britain is putting in $749 million and wants it running by 2027.

And here's why any of this counts. Every dollar either bank lends counts toward a NATO target: all member countries spending 5% of GDP on defence by 2035.

This didn't happen overnight. Britain and Canada put out a joint statement about combining the two banks back at a NATO summit in Ankara this summer. Rachel Reeves, Britain's finance minister at the time, told parliament in June that Britain was working closely with Canada on it.

That's a real shift. Britain and Germany had both kept the Canadian bank at arm's length before that. Now, John Healey, Britain's current finance minister, is reportedly considering joining it directly, according to British media reports this week.

And the money isn't the only thing moving.

Canada has formally applied to become a full-time member of the Joint Expeditionary Force. That's a group of ten allied countries, built in 2014, designed to respond fast to threats on NATO's northern flank. Britain runs it. Britain is backing Canada's bid.