Europe’s Credibility Gap

The second Trump administration’s National Security Strategy declared that “the days of the United States propping up the entire world order like Atlas are over.” That sentiment has animated much of the administration’s foreign policy over the past two years, and its approach to Europe has been no exception. In 2025, the United States suspended military aid to Ukraine, and in May of this year, it announced it would remove 5,000 troops from Germany. President Donald Trump has threatened to seize Greenland, the territory of a fellow NATO country, and promised to levy tariffs against member states that opposed the effort. When the United States and Israel attacked Iran in February, they neither consulted nor warned European powers, which have been left to face the war’s economic consequences largely alone.

Europe has not stood idly by amid this onslaught. It stepped in to fill the gaps left by the United States’ withdrawal of financial support for Ukraine in 2025. During the Greenland episode, European countries facing tariffs convinced Trump to back down by threatening massive retaliatory trade measures against the United States. And the continent has begun to deepen its other relationships. The EU has set up a $168 billion defense-loan scheme, with Canada as its first non-European member. Earlier this year, it finalized the largest trade agreement in its history, with India, and signed a long-delayed deal with the South American economic bloc Mercosur.

These measures have been encouraging departures from the bureaucratic indecisiveness for which the EU has frequently been criticized. But despite its leaders’ newfound interest in self-sufficiency, Europe remains dependent on the United States. In fact, some of its attempts to stand on its own have made it more dependent on the United States. European defense planning, command, nuclear deterrence, and military enabling systems still rely on American capabilities. Increased defense spending buys American weapons. As of 2025, the United States supplied more than half of the EU’s liquefied natural gas imports. Many of the continent’s most promising technology firms still move to New York or San Francisco.

This continued dependence has in turn weakened Europe’s credibility with other countries seeking new security, technology, and economic ties of their own. For decades, the European offer to these countries relied on the continent’s relationship with Washington. As long as the United States underwrote European security and welcomed Europe’s integration with its economy, that offer was an attractive one. Now that Washington has begun to treat both arrangements as negotiable, however, it no longer is. The weaker the transatlantic relationship becomes, the more Europe needs other countries’ export markets, raw materials, defense industrial capacity, and solidarity against coercion—and the less able it is to convince those countries of its worth as a partner. Europe needs a better offer, grounded in its own capabilities rather than those of its mercurial ally.

OFFER EXPIRED

European countries have long presented themselves as leaders on issues such as the environment, consumer protection, and high regulatory standards. To neighboring countries, Europe dangled membership in and association with the EU. Beyond the continent, it promised developmental and humanitarian partnerships in the form of aid through the EU and national agencies. Until recently, these were appealing terms: 13 countries have joined the EU since 2004, and more than 140 countries accepted some form of aid from EU or member state programs.

The United States upheld the underlying security and economic order that made these offers possible. EU aspirants could count on Washington to underwrite Europe’s defense through NATO, and and non-European countries could count on a U.S.-led rules-based economic order, within which they could easily access European aid, markets, and investment.

But the U.S. retrenchment has accelerated the emergence of a more bellicose “might is right” disorder in which different needs have risen to the fore. Countries are now seeking security partnerships to shore up their defense capabilities, stable trade relationships to protect against economic warfare, and financing to make up for cuts in aid and increases in the costs of government borrowing.

For example, when Ukraine turned to Europe in the early 2010s, it did so because of the prosperity and modernization that economic integration promised. But Kyiv now needs intelligence and weapons to fend off Russia, which Europe can deliver only through the United States. For countries similarly seeking security assistance and cooperation, dependence on such a fickle partner is a liability.

Partners hit by Trump’s tariffs need access to reliable markets to export goods and services once destined for the United States. But Europe has felt the need to defend its own economies instead of opening up its markets to them. For instance, the European Commission drastically increased tariffs on steel and reduced its quotas for duty-free imports, blocking India, South Korea, and Turkey from selling into the European market—precisely as those countries were searching for alternative markets to the United States.

Other countries need financing for infrastructure and the energy transition. Europe has the firepower to meet these countries’ needs, but its commitments take far too long to be realized as completed projects. And as in security, the U.S. withdrawal has left Europe adrift. Joint G-7 packages to finance clean energy buildouts in Indonesia, South Africa, and Vietnam, for example, suffered when Washington withdrew its support in 2025.

Europe has lately shown some ability to rise to the occasion. In 2025, EU member states’ combined annual military expenditure was approximately $461 billion, less than the United States’ $954 billion, but higher than China’s $336 billion and Russia’s $190 billion. When the United States wound down its aid to Ukraine in 2025, European governments made up most of the shortfall and have since committed to financing Kyiv’s war effort through 2027. The continent also has an existing defense industrial base, two permanent UN Security Council seats, and nuclear forces. Partners just beyond the core add more: Ukraine has a battle-tested army and an innovative drone industry, and Turkey has NATO’s second-largest army and access to the strategically important Black and Mediterranean Seas.

There is similar cause for optimism in trade and finance. The EU’s 2026 trade agreement with India removed nearly all tariffs for both parties, reduced nontariff barriers to trade, and made it easier for Indians and Europeans to temporarily work in each other’s markets. The EU’s Global Gateway investment program, Europe’s answer to China’s Belt and Road Initiative, passed its $335 billion mobilization target ahead of schedule.

These individual successes show that Europe has the potential to present partners with a more compelling offer. Yet much of that potential remains unfulfilled.

THE AGONY OF SELF-DEFEAT

Europe has substantial assets across security, trade, and finance, but it lacks the internal cohesion needed to bundle them into a comprehensive package to attract other countries and bolster its own autonomy. When Europe could fall back on the United States’ leadership in institutions such as the World Trade Organization and NATO, internal disunity was less of a problem: American military commanders not only supported but organized European defense, and U.S.-backed rules governing global trade opened foreign markets to European exports, reducing the need to negotiate bilateral agreements. Without that leadership, the continent has been left to overcome its internal fragmentation on its own.

Nowhere is that fragmentation more apparent than on security. European leaders have committed to improving the continent’s defense in response to Washington’s wavering on NATO, but defense budgets, industries, and forces remain primarily national. As governments prioritize negotiating the best deals for domestic firms and other constituencies, conflicts arise: joint projects fail, purchases overlap, redundant R & D efforts waste precious resources. These frustrations have ultimately led the continent to simply purchase more U.S. systems. The EU’s Security Action for Europe loan program aims to reverse this trend by financing member states’ joint purchases of European equipment. But loans alone will neither overcome distributional conflicts nor create common command structures, standards, and logistics.

Europe does negotiate its trade deals with one voice. But many agreements need to be ratified in each country, leaving them at the mercy of domestic lobbies, from farmers to automakers, which seek to protect their markets at the expense of the continent’s collective interest. More than a decade after Canada and the EU negotiated the Comprehensive Economic and Trade Agreement, for example, just 17 of the organization’s 27 member states have ratified it. The 2026 trade deal with Mercosur, in the works for decades, was immediately contested, politically and legally, by individual member states and their representatives in the European Parliament.

On finance, Europe does not lack money but channels it through a byzantine set of EU instruments, member-state agencies, development banks, and changing flagship initiatives. Partners are left to navigate this morass of funding sources, each with their own procedures, timelines, and conditions. In Ghana, for example, Europe is present through EU programming, member-state development agencies, the European Investment Bank, and Global Gateway initiatives. When the Trump administration’s cuts to the U.S. Agency for International Development hit Accra, a more coordinated Europe might have been able to make its finance more visible, usable, and politically credible.

Many of these challenges predate the U.S. retrenchment. But they were less damaging to Europe’s other relationships as long as Washington upheld an imperfect but generally secure global order. Now that U.S. leadership is no longer part of the European offer, though, they loom much larger for potential partners.

HELP YOURSELF

The United States is not the only great power to have weaponized its chokepoints. Beijing and Moscow have also used their dominance over important industries coercively. Europe’s problem is that attempts to reduce the continent’s exposure to Russian and Chinese chokepoints too easily increase its dependence on the United States. Weaning itself off Russian pipeline gas means buying American energy. Procuring rare-earth elements outside China’s supply chains means cooperating with Washington on critical mineral exploration. When, for instance, Beijing weaponized its demand for French cognac by imposing duties on the liquor in October 2024, the industry’s best alternative was the U.S. market—until the Trump administration levied tariffs of its own. A more enticing offer to other partners must be built on economic ties and capabilities that are not beholden to American commitments.

To make such an offer, Europe must first reduce its reliance on U.S. defense commitments and equipment, moving toward becoming a more equal partner within NATO. Although Europe is unlikely to replace the United States as a global security guarantor, it needs to be able to offer third countries viable security partnerships, sustained deterrence in its neighborhood, and the ability to act with coherence when American priorities shift.

It can begin by working faster and more efficiently with its current friends. Since 2022, Poland has bought South Korean tanks, howitzers, aircraft, and rocket artillery; more recent agreements have moved beyond off-the-shelf purchases toward technology transfers that enable production, service, and repair in Poland. Japan has joined with Italy and the United Kingdom to develop a next-generation combat aircraft through the three countries’ collaborative treaty-based Global Combat Air Programme. The EU-India Security and Defense Partnership signed in January 2026 provides a framework for cooperation spanning maritime security, emerging technologies, and the defense industry. Europe should build on this approach, making use of its partners’ strengths to benefit both their and its own security.

European dependence goes well beyond security, however. Europe has the scale, capital, universities, industrial base, and regulatory capacity to be a tech power. But a lack of later-stage financing, fragmented product markets, and shortages of specialized talent and compute have too often driven European entrepreneurs, including the founders of such high-tech leaders as Hugging Face, Arm, and Wise, to start, expand, or list their companies in the United States.

These companies might be persuaded to remain in Europe if they could count on investments and a truly single market. But only a tiny percentage of European pension fund assets are currently invested in venture capital. The EU has announced a slew of initiatives to increase venture capital funding, but it still lacks anything comparable in size to the biggest U.S. funds. The harder tasks are to integrate capital markets, reduce regulatory differences between member states, and dismantle barriers to cross-border investment and commerce. A Europe-wide financial system and consumer market would make investment more attractive, keeping the continent’s most promising innovators from crossing the Atlantic in search of funding and customers. A competitive tech apparatus would give Europe not just control over the leading technologies it produces but also the ability to offer partners a viable alternative to the U.S. innovation ecosystem.

Europe must also reduce its energy and raw-material dependence. As the war in Iran has shown, exposure to volatile fossil fuel markets can harm overreliant economies. The International Energy Agency has noted that renewable energy has partly insulated European economies from truly disastrous fossil fuel price shocks. But the risk of shortages of refined petroleum products, especially diesel and jet fuel, is a daily reminder of the continent’s ongoing reliance on imports over which it has no control.

Integrated energy markets offer a way to prevent such dependence from forcing U-turns on foreign policy. After Russia’s February 2022 invasion of Ukraine, Germany, which in 2021 had imported more than half of its gas from Russia, initially opposed an embargo on Russian oil and gas before reversing course in May of that year. When Russian gas subsequently stopped flowing, Berlin was spared shortages and a more severe economic crisis largely thanks to other European countries, which provided emergency supplies. The continent seems to have learned the right lessons from the episode: the European Commission’s 2026 work program, its annual legislative agenda, explicitly commits to building a “genuine Energy Union” through electric grid upgrades and the removal of cross-border bottlenecks. The more resilient its energy system becomes, the more reliable a partner Europe will be.

In raw materials, on the other hand, it has little hope of achieving self-sufficiency. The European Commission’s planned Critical Raw Materials Centre will gather market intelligence, coordinate joint purchasing, and facilitate stockpiling. But demand-side measures alone cannot produce the raw materials the continent needs. Europe could start to build a global network of partner countries by creating the conditions for investment in mines and refineries across Africa, the Americas, and Asia. Because mines, processing plants, and the infrastructure to transport their outputs require long planning horizons and prices are volatile, joint actions could make projects more financially attractive and less risky and would ensure the minerals produced have a market.

Finally, Europe needs the ability to retaliate when China or the United States threatens to choke it. Europe’s response to U.S. tariff threats exposed how difficult it can be to get European powers to agree to retaliate. But it does have a powerful tool at its disposal. In 2023, Europe created its Anti-Coercion Instrument, a bundle of economic countermeasures, including tariffs and restrictions on imports or exports and restrictions on access to EU public procurement, foreign direct investment, and intellectual property rights, that in essence permits European countries to weaponize other countries’ dependence on economic interactions with them. A global ACI, expanded to pool non-European partners’ resources for more powerful joint retaliatory measures, would not solve every problem for Europe and its partners, but it could swiftly convert some of Europe’s strongest assets into a partnership offer with real security benefits.

NEW WORLD, NEW FRIENDS

Europe’s relationship with the United States was founded on shared values, mutual reliance, and reciprocity. It enabled European countries to focus on rebuilding their economies after World War II and on building institutions to avert future wars on the continent. The tumult of the last two years has revealed that Europe took the benefits of that relationship for granted. Today, the continent faces different threats than it did 80 years ago, and it can no longer count on the United States to come to its aid. Rather than mourn the loss of its partner in Washington, Europe must find new ones built on the recognition of a different kind of mutual reliance: that most countries have little hope of resisting great-power coercion if they go it alone.

Building these new relationships to reduce European dependence on the United States would not mean shutting out Washington entirely. Both sides would still benefit from security cooperation through NATO, from continued trade and investment, and from an integrated international financial system. Cooperation with the United States would remain valuable but no longer indispensable. Europe will get better deals from the Trump administration and its successors if it can negotiate from a position of strength, undergirded by more diverse partnerships.

Those partnerships will not emerge overnight. Nor will a new coalition become a unified strategic actor immediately. But an improved European offer will set that coalition on the right path. As with all important endeavors, the hardest part is getting started.

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