In just over 75 days, President Donald Trump’s new Administration has released a seismic shock on the foundations of American foreign and defense policy. What had once seemed unshakable pillars – NATO solidarity, transatlantic security commitments, nuclear non-proliferation policies, and trusted intelligence alliances – are now in visible disarray. While the immediate shifts have made headlines, second-order consequences are quietly but profoundly reshaping the geopolitical order. Nowhere are these reverberations more visible than in Europe, where decades of strategic assumptions are being rapidly overturned.
Since its founding in 1949, the North Atlantic Treaty Organization (NATO) has been the cornerstone of Western and European defense, deterring Soviet – and later Russian – aggression through collective defense. Article V, NATO’s mutual defense clause, has only been invoked once: by European allies in defense of the United States following 9/11. This was both a symbolic and an operational moment of solidarity that underlined the alliance’s core unity and strength.
That foundation is now under direct assault – not from external adversaries, but from Washington. President Trump’s repeated questioning of NATO’s relevance, threats to withdraw U.S. troops from Europe, and open flirtations with Moscow imply a fundamental revision of America’s strategic priorities. European capitals, once confident in American commitments, are recalibrating their defense policies under a growing realization that the American “security umbrella” can no longer be relied upon. The “Signalgate” scandal in which Trump’s national security team mistakenly added a journalist to a group chat discussing an impending attack against Houthi targets in Yemen also exposed Vice President JD Vance and Secretary of Defense Pete Hegseth’s clear disdain for Washington’s European allies. America’s opponents will exploit this clear understanding of Trump’s national security team’s policy views.
But this rupture does not exist in isolation. The Administration’s trade wars with traditional allies, hostile rhetoric toward multilateralism, and transactional approach to diplomacy have accelerated the growing transatlantic divide. This new path for global order is a dramatic change from policies that provided decades of peace in Europe in the aftermath of the Second World War. The emerging “Trump doctrine” will lead to greater suspicion between the United States and its longtime allies as well as a rapid increase in the proliferation of nuclear weapons globally. Countries that had previously embraced the Non-Proliferation Treaty (NPT) will now feel a need to pursue nuclear weapons to deter aggressors and potentially defend themselves.
Arms Sales and Defense Industrial Impact
The most immediate financial fallout from this strategic realignment lies in the defense industry, and the future of the F-35 Joint Strike Fighter (JSF) is a clear illustration. The American aerospace industry annually exports over $125 billion—second only to American exports of oil and natural gas. Due to this new approach to American foreign and security policy, the F-35, a symbol of U.S. military-industrial leadership and NATO interoperability, is now at risk of becoming a casualty of geopolitics.
The Trump Administration’s decision to temporarily halt military aid to Ukraine in early March triggered unease across European ministries of defense. If Washington was willing to suspend military support during an active war in Europe, what assurances do F-35 purchasers have that avionics upgrades, parts, or maintenance contracts will be honored in the future?
That uncertainty is already being demonstrated in procurement decisions by America’s allies. Canada, a longstanding U.S. ally, has launched a review of its planned F-35 acquisition. Germany, always ambivalent about full dependence on U.S. platforms, is revisiting its defense strategy and weighing greater investment in European solutions, such as co-producing fighter aircraft with France. Portugal, once expected to finalize an F-35 purchase, has reportedly abandoned the program altogether. Foreign Affairs Minister Melanie Joly also confirmed that Canada is in negotiations with European governments about a joint defense alliance that would include joint procurement projects.
Compounding this, the administration’s 25% tariffs on aluminum and steel – essential components in aircraft and shipbuilding – are poised to inflate the cost of U.S.-made military hardware. That causes both a budgetary challenge for the Pentagon as well as allied buyers and creates additional incentives for them to pursue alternatives.
Intelligence Sharing in Jeopardy
For decades, the “Five Eyes” intelligence alliance has been the crown jewel of Western intelligence cooperation. The U.S., the UK, Canada, Australia, and New Zealand share not only signals intelligence (SIGINT) but also often human intelligence and emerging cyber threats. It is an arrangement that depends on treaties as well as hard-won trust, discretion, and professionalism.
That trust is now eroding rapidly.
Trump’s personal track record – disclosing Israeli intelligence to Russian diplomats in the Oval Office, publicly siding with Vladimir Putin over U.S. intelligence agencies in Helsinki, and mishandling classified documents following his first term – has left allies questioning Washington’s reliability as a steward of sensitive data. The lax security protocols that Trump’s national security team followed by sharing classified information about attack plans against the Houthis in Yemen only underlines this with the Israelis reportedly furious that information they shared was included in the chat.
There are also recent reports suggesting that one of Trump’s senior advisors has proposed expelling Canada from the Five Eyes consortium. While the proposal remains unofficial, its mere existence has triggered alarm within Ottawa’s intelligence community as well as with other “Five Eyes” member states.
Trump’s appointment of ideologically driven loyalists to top intelligence posts has compounded this problem. Kash Patel, known for his partisanship and limited operational experience in law enforcement, has been confirmed as FBI director. Dan Bongino, a right-wing media personality with no intelligence background, has been tapped as his deputy. Tulsi Gabbard, Trump’s Director of National Intelligence, has Congressional and military intelligence experience, but her political views have raised red flags among allies. There were already major concerns about her suitability during confirmation hearings, but this has been exacerbated as she struggled in recent hearings over the “Signalgate” scandal and unwillingness to reveal whether she had used a private cell phone for these chat room discussions.
These appointments risk politicizing intelligence assessments and further alienating allied agencies. The report that the Pentagon decided to brief Elon Musk – without a clear operational requirement – on sensitive war planning for a potential future conflict with China adds another layer of concern, particularly since the tech billionaire has significant investment interests in China. There is also growing fear that Musk's decision to lay off or offer buyouts to longtime employees of the CIA, National Nuclear Security Administration (NNSA), and other national security agencies through his DOGE effort could undermine national security and harm intelligence-sharing relationships.
All these decisions, scandals, and appointments underscore to American adversaries how porous U.S. intelligence firewalls may grow or have grown.
Collapse of the Nuclear Non-Proliferation Regime
Perhaps the most consequential and far-reaching aftershock of Trump’s defense policy pivot is its effect on nuclear stability. For eight decades, the U.S. has underwritten global non-proliferation through extended deterrence – a promise that allies did not need their own nuclear weapons because America would defend them. That architecture is now at risk of collapse.
European leaders, from Poland’s Prime Minister Donald Tusk to Germany’s future chancellor, Friedrich Merz, and Turkish President Recep Erdogan, are openly entertaining the idea of acquiring their own nuclear deterrents. Some may pursue hosting U.S. tactical nuclear weapons as five NATO nations have done for decades. Others may seek full nuclear sovereignty. France, already a nuclear state, is exploring an expanded role for its arsenal, with President Macron proposing that Paris would provide an EU-wide nuclear umbrella. These discussions were unthinkable until recently. Today, they are accelerating rapidly.
The ripple effects extend well beyond Europe. In East Asia, where North Korea’s arsenal is growing and China’s military policies are increasingly aggressive, public opinion is shifting fast. Polls show that over 70% of South Koreans now support developing indigenous nuclear weapons. Taiwan’s leadership, facing strategic uncertainty, may revisit its long-abandoned nuclear program. Even Japan – long committed to its non-nuclear principles – is facing mounting internal debates over whether continued reliance on the American “nuclear umbrella” remains viable.
The logic is brutal in its clarity: if America abandons its traditional European allies, why would it stand firm in Asia?
The second-order effects of these shifts are compounding into a systemic transformation of the global order. The erosion of trust in U.S. commitments creates cascading incentives for hedging strategies, proliferation, and regional arms races. America’s traditional position as both the "arsenal of democracy" and the global security guarantor is fracturing, both functionally and symbolically.
A Strategic Realignment in Motion
The most critical takeaway is this: America’s strategic commitments are no longer assumed constants. Whether underwritten by defense treaties, nuclear guarantees, or intelligence-sharing, the architecture of American global leadership is being dismantled piece by piece.
Following Trump’s 2016 victory, Europeans asked: “Is he the aberration?” The answer seemed to come with the Biden Administration’s restorationist approach – “America is back!” But the 2024 election provided Washington’s allies with greater clarity and a further answer to this fundamental question. Trump’s return signals a new baseline. The United States is no longer the predictable pillar of the liberal international order. Instead, it is now a source of volatility.
Even a future Administration, Republican or Democrat, may struggle to rebuild the credibility that has been lost. In foreign policy, trust is cumulative, but its loss is often irreversible.
We are now witnessing the preliminary stages of a historic shift. What Trump has initiated will outlast his presidency. America’s allies are recalculating, rivals are recalibrating, and the world is bracing for an era where U.S. power is no longer assumed.
Investors, strategists, and policymakers alike must prepare for a landscape where alliances are transactional, nuclear thresholds are blurred, and intelligence partnerships are conditional. The post-war order is no longer under strain – it is being replaced.
The aftershocks of this realignment are just beginning.
