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If the deepening rift between the United States and Europe hardens into a permanent split, historians will look back at January as a turning point.
The harbingers were the speeches at the World Economic Forum in Davos, Switzerland, first from Canadian Prime Minister Mark Carney, who urged middle-sized countries to band together against the large powers’ unfair dominance, then from President Donald Trump, who heaped a staggering amount of contempt and scorn on America’s allies, even by his already-alarming standards.
But the kicker came in actions that allied leaders took after Davos. Most dramatically, starting Jan. 30, 10,000 troops from 11 nations of NATO launched a military exercise—its largest scheduled for the coming year—without the participation of any American troops. This is unprecedented in the alliance’s 77-year history.
In other events leading up to the NATO exercise:
Canada signed a major free-trade deal with China, allowing, among other things, a massive import of Chinese cars.
The European Union signed a trade agreement with India—and a still-larger one with South America’s Mercosur bloc (Argentina, Brazil, Paraguay, and Uruguay), the latter of which will create one of the largest free-trade zones in the world.
The French Parliament passed a law barring government officials from using U.S. platforms, such as Zoom, Teams, and Google Meet, for videoconferencing.
Denmark, still reeling from Trump’s threats to take over Greenland, announced it was selling its stash of U.S. Treasury notes, worth $100 million. Even before these moves, central banks worldwide—not just in Denmark—have been shifting their reserves toward other countries’ currencies. An analysis by J.P. Morgan calls this trend “de-dollarization” and attributes it, in part, to the turbulence of Trump’s tariffs—many of them imposed for punitive and arbitrary reasons—and also to perceptions of a decline in “the U.S.’s overall standing as the world’s leading economic, political and military power.”
In each of the last eight months, the U.S. has seen a steadily steep decline in the number of tourists from abroad, especially from Western Europe, resulting in a loss of $12.5 billion in revenue. (This isn’t because foreigners are staying home; of 184 nations analyzed by the World Travel & Tourism Council, the U.S. is the only one seeing a drop in international visitors; foreigners are traveling, just not to our shores.)
As concerning as they are, we should not overstate the significance or the magnitude of these developments. They’re, to some extent, reversible; they haven’t shifted the global balance of power—at least not yet. NATO, by charter, is still commanded by a U.S. general, and this isn’t likely to change anytime soon; even in NATO’s go-it-alone exercise, U.S. officers are assisting with logistics and coordination. Mark Rutte, a former Dutch prime minister, now NATO’s secretary general, told the European Parliament this week that they were “dreaming” if they thought the EU could defend the continent without U.S. assistance. Much as his remarks annoyed his fellow Europeans, he’s right. Defense analysts in Berlin and London have told me that it would take 10 years for Europe to build an independent defense force—and that’s if they started spending a lot more money on defense right now. (They have boosted their budgets but are limited by their own domestic politics.)
As for world trade, the dollar still reigns supreme; no single alternative currency is anywhere near supplanting it. Trump’s tariff threats—including those that he’s made against Canada and the EU for its recent attempts to break away from American dominance—can still make allied leaders and bankers hesitate.
Still, the trends are genuinely historic. Until the Trump era (and he is defining this era in so many ways), our allies hadn’t seriously even thought about taking any of these steps. But Davos intensified the trends and clarified the rift (or, as Carney put it in his speech, the “rupture”), to the point where they are now not just thinking about taking steps like these but actually taking them.
The New York Times’ story about the NATO exercise noted that it was “conceived long before President Trump was accused of undermining faith in the military alliance,” but this claim is misleading. Yes, it was planned before Davos, where these doubts were intensified—but Trump has been “undermining faith” in U.S.-led alliances generally ever since he was elected back in 2016. Several times since, he has publicly pondered pulling out of NATO, and he has said he would not come to the defense of NATO members under attack—the central pledge of the alliance—if their military budgets were lower than they’d promised.
The Times correctly notes that the exercise, code-named Steadfast Dart, is designed to show what NATO’s European members “can do on their own”—to “test how well they could work together if the American forces, which usually do the heavy lifting, were occupied elsewhere.”
As described on NATO’s website, the scenario played out in the exercise involves mobilizing NATO’s Allied Reaction Force in the event of a crisis on the “eastern front”—i.e., along what would be the opening battle lines of a Russian attack. It’s a reprise of a similar exercise, also called Steadfast Dart, that occurred at this time last year, scheduled deliberately on the anniversary of Russia’s full-scale invasion of Ukraine. The difference is that last year, U.S. troops were taking part; this year, they’re not.
The test of going it alone isn’t meant as a prediction of whether the United States would send troops to fight in a war for Europe. But Trump has already upended a world where they could count on the U.S. as a reliable trade partner. They now see the need to lay the groundwork for the day when it might no longer be a reliable guarantor of their security. This perception, and the adjustment to it, could well define the next era in world politics.
