Donald Trump, explained.
The United States, under Donald Trump, appears unconcerned that its actions are souring its international approval (Molly Riley/White House Pho
From gold reserves to arms contracts, Europe is systematically reducing its exposure to US capriciousness.
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Allies are done waiting for America to grow upAllies are done waiting for America to grow up
A year on from the shock of US President Donald Trump’s April 2025 announcement of unilateral tariff increases, US trading partners are openly shrugging off the administration’s insults and demands. This has recently been exemplified by the refusal of US treaty allies to be drawn into Trump’s war on Iran, notwithstanding his threats and admonishments on social media.
The United States has used its role as the world’s economic hegemon in a bid to coerce its adversaries as well as erstwhile allies. Trump and his political acolytes have frozen foreign assets held in the US, cut off access to US banking and financial systems, and ignored international laws and agreements where they have deemed this expeditious in achieving their short-term goals, notably in seeking to “rebalance” goods trade.
The United States, under Trump, appears unconcerned that its actions are souring its international approval. A global Gallup poll conducted in 2025 showed China more popular than the United States. Disapproval of US leadership reached an all-time high of 48%, most notably in US allies. This can only have worsened after Trump’s war on Iran, which has caused global economic distress, including for the countries that Washington once counted upon as steadfast friends.
The early shock and panic caused by Trump’s tariffs saw many countries and trading blocs rush to lock in new trade agreements with the United States. Countries also recognised an administration willing use its hegemonic position to coerce – acutely aware of their reliance on US banking, information technology and military hardware.
US partners are unlikely to put faith in an American electorate that has twice delivered a president unwilling to consult allies or to respect international agreements.
Many are taking steps that will reduce their vulnerability to US capriciousness. These actions will not only reduce the levers Washington can use against them in the future, but will also erode, over the longer term, US exports of services in which it currently holds a virtual monopoly. It will reduce defence reliance on the United States, the world’s premier arms exporter.
This is especially clear in Europe, a special target of Trump’s invective.
The European Union is acting to increase its independence from US financial systems in the wake of increasing US-EU tensions. The European Payment Initiative (EPI) plans to develop the German digital wallet and insta-person-to-person payments system WERO into a European-wide alternative to the US Visa and Mastercard by 2027. And European financial institutions are developing local alternatives to US payment services like PayPal.
The French Central Bank recently completed the transfer of its gold reserves from New York to Paris. Although its governor stated the decision was not politically motivated, the move, which commenced in July 2025, does have the effect of removing France’s gold reserves from the risk of US seizure.
The plenary session of the European Parliament in Brussels, Belgium, March 2026 (CC-BY-4.0: © European Union 2026)
Other European countries are considering similar steps. German and Italian politicians have been pressing their respective governments to repatriate more of their gold reserves in the wake of Trump’s threats to the US central bank’s independence. The two countries reportedly have the world’s second- and third-largest gold reserves, respectively, after the United States.
European governments are moving to ditch US software for local or open-source alternatives, fearing the United States could require US providers to deny access to critical services. US sanctions last year led Microsoft to suspend the email account of The Hague-based International Criminal Court’s chief prosecutor, highlighting the risks that US control pose. And last month, a European alternative to Microsoft Office and Google Workspace – Office.eu – was launched in the Netherlands.
A similar story is unfolding with defence procurement. In 2025, the European Union launched its Security Action for Europe (SAFE) to strengthen Europe’s defence capabilities amid concerns over the reliability of US military protection. SAFE has a new €170 billion loan instrument for joint procurement that Canada –also looking to diversify away from the United States – has joined. Concerned about US reliability, Washington’s allies are turning to non-traditional arms suppliers, such as Japan and South Korea, which are looking to grow their arms exports.
These developments are still in their early days. But they highlight the risks that Trump’s cavalier approach to US trading partners and allies pose to US trade and economic influence. What’s more, these changes are likely to be long-lasting. US partners are unlikely to put faith in an American electorate that has twice delivered a president unwilling to consult allies or to respect international agreements.
About the author
Craig Keating
Craig Keating is a former analyst, ex-diplomat, and long-time Thailand watcher.
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