America’s Retreat, Europe’s Reckoning: Navigating the Fallout of Trump’s Second Term

For over two decades, successive U.S. administrations have pursued fleeting hopes of recalibrating relations with Russia, only for such efforts to unravel in the face of geopolitical realities. Now, under Trump’s renewed leadership, this cycle repeats—but with a crucial difference. Rather than a misguided attempt at diplomatic engagement, the current shift reflects a deeper transformation in American foreign policy: a pivot away from long-standing alliances and democratic values toward an increasingly transactional, self-interested approach. Whether driven by personal admiration for authoritarian leaders, political advantage, or economic self-interest, Trump’s foreign policy choices are eroding America’s traditional role as a stabilizing force in global affairs. Nowhere is this more evident than in his administration’s stance toward European allies, its aggressive and erratic trade policies, and its reversal of commitments to Ukraine. As Washington retreats, the burden of upholding a rules-based international order increasingly shifts to its traditional partners—especially Europe.

This need is not only challenged by U.S. disengagement and erratic policymaking but also undermined by overt hostility—signals that could hardly be clearer. In his first major overseas trip, Vice President J.D. Vance’s speech at the Munich Security Conference on February 14th epitomized this shift. He openly rebuked European leaders for their efforts to combat the rise of far-right extremism and Russian disinformation, instead portraying mass migration—framed as the result of “conscious decisions” by European policymakers—as Europe’s foremost security concern. After implicitly supporting the far-right, Nazi-adjascent AfD party in his speech, Vice President Vance met personally with its co-chair, Alice Weidel, to formally endorse the party as a political ally just nine days before Germany’s elections. Bolstered by a similar endorsement from tech billionaire and Trump ally Elon Musk, this move was rightly perceived by Berlin as a blatant act of election interference by a foreign government seeking to empower like-minded populist and authoritarian regimes.

Reversals of longstanding U.S. foreign policy positions quickly moved from rhetoric to action, culminating in the emergence of a global trade war—one that is increasingly pitting the U.S. against its closest allies and trading partners, including the E.U., Canada, and Mexico. Dubbed "The Dumbest Trade War in History" by the Wall Street Journal, Trump imposed a 25% across-the-board tariff on all imported goods from Canada and Mexico, with a lower 10% tariff on Canadian petroleum and energy imports. Additionally, U.S. automakers received a temporary one-month reprieve, given the deep interconnections of their supply chains developed over decades of North American free trade. The E.U. has been subjected to 25% tariffs on steel and aluminum imports to the U.S., which were swiftly met with reciprocal levies on U.S. exports. 

Trump's so-called “Liberation Day” on April 2nd introduced a chaotic wave of further, “reciprocal” tariffs affecting over 180 countries, including a baseline 10% tariff on all imports and dramatically higher rates on others—such as a 50% tariff on Lesotho, a small, landlocked African nation. These tariffs were later revealed to stem from a deliberately opaque algebraic formula that, rather than targeting trade barriers as publicly claimed, penalized countries based on trade imbalances. The inclusion of two canceling constants served to mask this intent, obfuscating the formula’s true design and insulating it from meaningful scrutiny, albeit very briefly. Markets reacted swiftly. A sharp equities downturn was followed by the largest selloff in U.S. Treasury bonds since 2009, prompting the White House to once again reverse course and announce a temporary 90-day suspension of the so-called reciprocal tariffs. Notably, China was excluded from the reprieve, and the ongoing tit-for-tat trade war with the U.S.’s third-largest trading partner has seen tariffs on some goods climb as high as 245%, pushing the average U.S. tariff rate to 28%—its highest level in over a century.

Whether Trump's focus on tariffs is intended as a negotiating tactic, a macroeconomic lever, or a punitive measure, his approach appears clumsy and self-defeating. In simple terms, tariffs raise the cost of imports in the U.S., leading Americans to purchase fewer foreign goods. This, in turn, reduces the demand for exchanging U.S. dollars for foreign currencies. As fewer dollars are sold, the dollar strengthens, making American exports more expensive and less competitive globally. The result is a double blow: harm to American manufacturing firms and reduced purchasing power for U.S. consumers. Should foreign countries retaliate with tariffs of their own, as is currently the case, the impact is only exacerbated.

This effect was evident even under the tariff regime implemented during Trump’s first term, where tariffs on China resulted in a net negative impact on U.S. manufacturing and overall employment, and also failed to reverse trade imbalances. As the current approach is even more sweeping, financial markets have been reeling, estimates on the likelihood of a significant U.S. recession in the coming year have reached as high as 60%, and the major economic ramifications for the U.S. and its trading partners are coming into clearer focus. If we interpret Trump’s trade war as a strategy to force diplomatic concessions and negotiate new trade agreements, the evidence so far suggests otherwise. 

Trump has offered limited avenues for meaningful negotiation, flatly refusing to engage with Brussels over the steel and aluminum tariffs. His swift reversal of the widely touted “Liberation Day” tariffs further signaled a lack of strategic commitment—mere economic realities alone were enough to force a retreat. Moreover, the pattern of his most aggressive tariff targets according to the aforementioned formula defies economic logic. Trade imbalances, which reflect differences in spending versus production rather than trade barriers, were used as justification, highlighting not only a misunderstanding of basic economics but also undermining Trump’s credibility as a serious or good-faith negotiator on trade.

This is only further underscored in the case of Canada and Mexico as he has presented an incoherent mix of grievances tied to political disputes, mass migration fears, and fentanyl inflows, without offering clear policy pathways for resolving these issues. Furthermore, Trump abruptly withdrew tariffs on the day they were set to take effect after securing border security commitments from both countries, only to later reimpose the tariffs and shut down negotiations altogether—a decision that exemplifies the erratic and unpredictable nature of current U.S. trade policy. If the strategy is intended as a punitive measure, it is hard to justify the disproportionate focus on America’s closest allies. Even Canada and Mexico—whose trade agreements were renegotiated by Trump during his first term—have not been spared from the ire of Trump 2.0. 

Trump’s personality, leadership style, and past behavior may provide more clarity on his rationale than the traditional frameworks of conventional policymakers. For decades, he has viewed the world through a transactional, zero-sum lens, dividing it into clear winners and losers: you either dominate and win, or you are dominated and lose. As his special envoy to Ukraine and Russia has noted, “President Trump approaches diplomacy and engages in a very transactional manner, with economics as the foundation and driving force behind international affairs.” One of the rare constants in Trump’s worldview—stretching back to the 1980s—has been his belief in protectionism, rooted in the conviction that the United States has been “ripped off” by its trading partners. 

This perspective informs a leadership style marked by grandiose pronouncements and sharp rhetoric, which are wielded as tools of leverage in his bid to project strength and claim personal victories, however limited the results may be. While this binary worldview may have suited Trump’s dealings in 1980s Manhattan real estate, as chronicled in The Art of the Deal, it is poorly suited to the complexities of modern global economics and geopolitics. The result is a kind of purposeful chaos, as an increasingly insular and personalist administration shields the president from critique, even on the impacts of a global trade war. To the rest of the world, and especially America’s allies, this trade war appears to be little more than an unwarranted and harmful imposition of hostility and economic hardship.

The influence of Trump’s inward-looking approach and personality has extended far beyond economic policy, shaping stark shifts in the longstanding role of U.S. security policy. Since the Munich Conference, actions by the White House have further eroded confidence in America’s commitment to its security obligations, particularly within NATO. During his first term, Trump repeatedly threatened to withdraw the United States from the alliance and avoided explicitly reaffirming the nation’s commitment to Article 5 of the North Atlantic Treaty. In his second term, however, these tensions have escalated—Trump’s actions have directly undermined confidence in U.S. willingness to uphold long-term European security.  

In early February, Trump arbitrarily raised the bar for NATO member defense spending, increasing the target from 2% of GDP to an unprecedented 5%—a figure that even the U.S. falls short of, with current spending at 3.4%. This move seems designed to further justify his long standing disdain for what he sees as Europe freeriding on America’s security guarantees. While the need for Europe to strengthen its defense capabilities has become increasingly evident since Russia’s full-scale invasion of Ukraine—23 of NATO’s 32 member states now meet the 2% spending target—arbitrarily moving the goalposts to appease Trump undermines the collective resolve that NATO’s credibility depends on. The situation is further complicated by Trump’s recent suggestions that the U.S. might withhold protection from countries he deems insufficiently committed, a stance that risks eroding the very foundation of the alliance’s deterrence via its collective defense pact.

Moreover, open territorial threats against NATO allies Canada and Denmark, the cancellation of future joint U.S. military exercises in Europe, and discussions of redeploying American forces from Germany to Russia-friendly Hungary signal a shift that appears less isolationist than overtly anti-Western. Even longstanding soft power institutions like Voice of America and Radio Free Europe/Radio Liberty—once vital tools in countering authoritarian propaganda—have come under attack by the Trump administration. This realignment was made strikingly clear on the third anniversary of Russia’s full-scale invasion of Ukraine, when the U.S. twice sided with Moscow at the United Nations—first by joining Belarus and North Korea in opposing a European resolution condemning Russia, and then at the Security Council, where it drafted and supported a resolution calling for an end to the war while conspicuously avoiding any criticism of the Kremlin. Taken together, these actions reflect an administration increasingly aligned with populist authoritarian regimes, a shift underscored by its own domestic assaults on democratic institutions.

Nowhere has the abrupt shift in U.S. foreign policy away from its allies been more striking than in its approach to Ukraine, as Trump scrambles to deliver on his long-overdue campaign promise to end the war on “day one.” His administration’s posture has veered from pressure tactics to outright alignment with Kremlin narratives. What began with an attempt to strong-arm Kyiv into surrendering critical mineral resources in exchange for continued military aid escalated into a diplomatic ambush of Ukrainian President Volodymyr Zelenskyy at the White House—an astonishing reversal from the close U.S.-Ukrainian ties of just three months prior. Rather than leveraging Ukraine’s battlefield gains to extract concessions from Russia, Trump has instead framed Moscow as the preferred negotiating partner, blaming Ukraine for the war and dismissing Zelenskyy as a “dictator without elections,” echoing key Kremlin propaganda. This narrative was reinforced by Trump’s chief negotiator for the war, Steve Witkoff, who amplified pro-Kremlin rhetoric on the eve of ceasefire talks in Riyadh on March 23rd. The White House’s tacit adoption of Russia’s framing suggests a broader shift: the administration appears to view Ukrainian resistance, rather than Russian aggression, as the primary obstacle to peace—one that must be broken through diplomatic coercion, unilateral concessions, or both.

Trump has approached U.S.-Ukraine relations with his signature transactional mindset, seeking a swift end to the war by demanding billions in “repayment” for U.S. aid, including revenue from Ukraine’s mineral extraction industries. However, this rush to broker a resolution has only weakened U.S. negotiating leverage, failing to shift Russia from its entrenched demands for territorial concessions, Ukraine’s disarmament, and the rejection of future security guarantees—terms even Trump himself cannot seem to accept. In doing so, Trump seems to have overlooked a fundamental principle of negotiation: never let the other party believe you need the deal more than they do. The lack of progress has reportedly frustrated Trump, leading him to threaten secondary tariffs on Russia’s trading partners. 

This moment presents a critical inflection point for Trump to recognize key realities: Russia is the aggressor, facing a significant commitment problem in any ceasefire agreement without credible security guarantees for Ukraine. Additional military assistance for Ukraine could help strengthen its negotiating position and undermine Russia’s current calculus, which sees a prolonged war as advantageous. However, the damage caused by policy reversals and open hostility toward U.S. allies may be irreversible. Excluding Europe—which has collectively provided more aid to Ukraine than the U.S.—from the mineral deal and the ceasefire negotiation process, coupled with Trump’s overtly pro-Russian stance, likely undermines any remaining optimism in Ukraine or Europe about the peace process under his leadership.

Evolving attitudes in Europe and Ukraine underscore this growing rift. While Trump’s first term was largely seen as a temporary disruption in U.S. politics—one that would soon be corrected—his return to office signals a more profound shift in America’s global posture, increasingly at odds with the 75-year-old international order it helped create. Whether this transformation endures in the long term, its immediate effects are already evident. Trump’s unforced economic confrontation with the EU has thus far backfired, with the European Commission moving to impose firm reciprocal tariffs and impose its anti-coercion “nuclear option” should the tit-for-tat continue. 

On continental defense, European leaders have openly questioned U.S. long-term commitments, and recent polling indicates that more than half of Europeans view Trump as an “enemy of Europe.” This has led European policymakers to accelerate efforts to bolster domestic defense industries and reduce dependence on the U.S., integrating Canada into these initiatives and casting uncertainty over the future of multibillion-dollar F-35 Lightning procurement contracts across NATO. Meanwhile, the White House “Signalgate” scandal has heightened concerns over intelligence sharing, as the apparent use of commercial messaging apps for highly classified discussions—potentially to circumvent U.S. federal records laws—poses serious security risks for both the United States and its allies. 

America’s withdrawal from Europe’s security architecture has all but eliminated any near-term possibility of Ukraine joining NATO, representing one of the most significant reversals of U.S. commitments to long-term regional stability. In response, Zelenskyy has increasingly turned to Europe, advocating for the creation of a unified “armed forces of Europe” to counter Russian aggression—an implicit recognition that Ukraine can no longer depend on the United States as its primary security guarantor. Yet, regardless of Trump’s policies, Russia’s revanchist ambitions remain the greatest existential threat to the international order and the institutions designed to prevent war. With Washington stepping back, it is only natural for Zelenskyy to look to America’s traditional European allies to uphold these principles.

To navigate this challenge, Europe must carefully balance mitigating the economic fallout of a potential trade confrontation with the United States while bolstering its own defense capabilities to address security threats independently. Attempts to influence Trump through flattery have yielded limited success and should not form the foundation of Europe’s strategy in countering his trade policies. Instead, European leaders should recognize the growing weaknesses in Trump’s domestic political position—his approval ratings remain historically low for an incumbent, his key policy initiatives face widespread public disapproval, and growing economic anxieties have begun to expose fractures within the Republican ranks, albeit not yet on a wide scale.

These domestic vulnerabilities limit Trump’s ability to escalate a tariff war without political risk. A well-calibrated European response could further constrain him by strategically targeting key industries in swing states and competitive districts, not just safe-Republican states as Canada has done. By pressuring the economic sectors most vital to Trump’s electoral prospects, European leaders can erode one of his core sources of political legitimacy—economic growth—while making further escalation too politically costly. With mounting domestic opposition and an already fragile base of support, Trump has little room to sustain an aggressive trade war without facing backlash from both businesses and voters.  

For European leaders, however, the political calculus runs in the opposite direction. As Trump’s hostility toward allies deepens and his economic policies are increasingly viewed as adversarial, public opinion in Europe has hardened against him. This creates a political imperative for European governments to respond forcefully, as failing to do so could invite domestic criticism for weakness in the face of economic coercion. The declining fortunes of right-wing euroskeptic parties—once aligned with Trump—further illustrate this shift, as their association with him has become a political liability rather than an asset. By exploiting Trump’s political vulnerabilities and transactional approach, Europe may push him to recognize that his current path is less advantageous than a negotiated alternative. However, even with strategic leverage, the severe economic consequences of this unprecedented situation remain largely unavoidable.

Amid the persistent existential threat of Russian revisionism, Europe must adopt a security strategy that maximizes strategic effect while minimizing costs. Ensuring its long-term defense requires sustained investment in military capabilities, both through industrial expansion and continued material support for Ukraine. While this shift is gaining traction, its durability remains uncertain, as fiscal pressures from a potential economic downturn could weaken commitments.

However, deterring Russian aggression requires more than just defense spending. With the U.S. reversing key commitments—most notably to Ukraine’s NATO accession—Europe must develop alternative deterrence mechanisms. Any new approach must address Russia’s clear credible commitment problem, as demonstrated by its violations of the Budapest Memorandum, repeated breaches of the Minsk ceasefire agreements, and the diminishing costs of reneging on future settlements. Left unchecked, Russia will exploit any negotiated pause to reconstitute its military and refine its operational doctrine for renewed aggression. Ironically, Putin’s strategic approach to diplomacy—exploiting agreements as temporary tools rather than binding commitments—mirrors Trump’s transactional worldview.

Without NATO’s collective security umbrella, the most effective deterrent against renewed Russian aggression would be a conventional tripwire force. This Cold War-era strategy, successfully employed in West Berlin against the Soviet Union and currently in the Baltics and the Korean DMZ, relies on deploying a credible but limited military presence to raise the costs of aggression. To be effective, such a force in Ukraine must be large and capable enough that a renewed Russian offensive could neither bypass nor swiftly overcome it before reserves could mobilize.  

A European-led tripwire force would send a clear signal of European resolve, significantly increasing the risks for Russia should it violate any future ceasefire. It would also blunt Russia’s reliance on “salami tactics”—incremental encroachments on sovereignty like those used in Crimea—by forcing Moscow to confront the prospect of a direct confrontation with European forces from the outset. If a peace agreement remains elusive, such a force could be stationed in Ukraine’s western oblasts, away from active combat zones, alleviating pressure on Kyiv by securing its borders with Transnistria and Belarus and allowing Ukraine to concentrate its military resources on the front lines.  

Beyond its deterrent function, a European-led deployment would offer a more cost-effective alternative to an indefinitely deployed standing army, ensuring the viability of deterrence even amid possible fiscal constraints from an anticipated global economic downturn. Additionally, accelerating Ukraine’s EU accession—a process entirely within Europe’s control—would reinforce this deterrent by deepening economic integration and solidifying Ukraine’s place within the European security architecture. The rapid evolution of U.S. global leadership has thrust this approach into the spotlight, and by meeting these criteria, Europe may yet secure the lasting peace that now hangs in the balance.

The consequences of Trump’s policies will extend far beyond his tenure, reshaping international alignments and exposing vulnerabilities in the global economic and security order. While his erratic trade war with key allies may ultimately prove unsustainable, the damage to transatlantic trust will not be easily repaired. Europe faces a difficult balancing act: countering economic aggression while bolstering its defense autonomy to deter further Russian revisionism. The prospect of a European-led security initiative, potentially including a tripwire force in Ukraine, marks a pivotal step in this evolution—one that may define the continent’s strategic independence in the years ahead. Trump’s presidency has inadvertently accelerated a shift that may prove irreversible: a Europe no longer reliant on American leadership but instead forging its own path in defense, diplomacy, and economic resilience.