The decline of globalization and the future of NATO
Following the announcement of President Trump’s tariffs, Europe is left to confront the reality of diminished U.S. presence in NATO.
In a nutshell
- Globalization is faltering as neo-mercantilism rises among nations
- Trump’s tariffs unveil a crucial shift away from a rules-based global order
- U.S. withdrawal from NATO could lead to major shifts in European security
- For comprehensive insights, tune into our AI-powered podcast here
Globalization is unraveling, and the rules-based international system – if it ever existed – is collapsing. On April 2, 2025, United States President Donald Trump announced his “Liberation Day” reciprocal tariffs, causing a ripple effect across the globe. International markets plummeted, diplomats rushed to negotiate with the U.S. and media pundits struggled between explanation and indignation. Far from a mere trade war, the “Trump Tariffs” mark a pivotal step toward the dismantling of economic globalization and globalism as we know it. Could a U.S. withdrawal from NATO be next?
Globalization, once heralded as a means to boost worldwide economic inclusion, is waning. Since the fall of the Berlin Wall and China’s economic opening, the global economy has become increasingly interconnected. International supply chains helped lift many Africans from life-threatening poverty and fostered a growing global middle class. However, progress halted after the 2008 financial crisis, which revealed just how fragile global economic connections can be. During the Covid-19 pandemic in 2020 and 2021, supply chains were further disrupted, leading governments to focus more on building domestic resilience.
As a result, countries have adopted a neo-mercantilist approach, prioritizing exports and protecting their own industries to strengthen national economic power. China’s dual circulation strategy, introduced in 2020 to balance domestic self-reliance and global trade engagement, is one example of this strategy. The European Union’s sweeping industrial policy, framed as the Green Deal, is another. President Trump’s concern with trade deficits reflects a broader trend signaling the decline of economic globalization.
Globalism’s last stand
Globalism, the pursuit of common institutions and rules, has also faltered. The rules-based international order was rooted in a post-World War II system built on shared institutions, integrated economies and a global security architecture centered on the U.S. in the West and the Soviet Union in the East. With the demise of this order, the U.S. has remained its guarantor. However, China’s rise has challenged its dominance.
Whether such an arrangement was based on established rules is questionable. It may be better described as channeling systemic competition through international organizations. The United Nations essentially became the platform for the U.S. and the Soviet Union to confront each other.
Today, the U.S. and China compete through international organizations. Over the past decade, however, this rivalry has extended into various other arenas, such as trade, military, technology and information. Both global powers have frequently disregarded the rules of the multilateral organizations. A prime example is how each country contributes minimally to the International Court of Justice.
The decline of globalism is not solely due to President Trump’s rejection of it; it has been ongoing for a long time. With its framework of institutions, China’s Belt and Road Initiative offers a different playbook from the West’s. The EU, striving for a world led by regulation and democratic principles, challenges any order negotiated within the UN. The U.S. withdrawal from the Paris Agreement and the World Health Organization, as well as its suspension of funding to many UN agencies, mark further steps in the demise of globalism.
The return of isolationism
From a European perspective – geographically, not politically – the new drive toward American isolationism is especially concerning. American isolationism describes the U.S. foreign policy approach that gained prominence in the 19th and early 20th centuries, characterized by reluctance to engage in international conflicts or establish alliances, especially in Europe and Asia.
American isolationism, rooted in President George Washington’s 1796 farewell address, urged the nation to “steer clear of permanent alliances with any portion of the foreign world” and avoid “interweaving our destiny with that of any part of Europe,” which could entangle “our peace and prosperity in the toils of European ambition, rivalship, interest, humor, or caprice.” Isolationism gained traction after World War I, prioritizing domestic concerns and minimizing foreign military and political commitments. It peaked during the interwar period but waned after the U.S. entered World War II, ushering in an era of interventionism and global leadership. Today, as this role appears to be diminishing, Europe faces the challenge of navigating a fragmented security landscape without its primary ally.
Read more by Henrique Schneider
- Donald Trump and the art of disruption
- The GDPR does not protect citizens’ data
- Who is at the forefront of AI innovation?
NATO is a product of the U.S.’s period of global leadership. After World War II, the U.S. spearheaded a prominent defense alliance against the communist threat. This alliance provided European countries with a robust security guarantee. Even after communism’s collapse, NATO persisted, evolving into an often reluctant global enforcer, undertaking peacekeeping missions in regions like the Balkans, the Middle East and the Gulf of Aden.
Despite the eagerness of some Eastern European nations to align with NATO, the alliance primarily revolves around U.S. interests. Since Russia invaded Ukraine in 2022, Europe has become more aware of its frailty. Meanwhile, the U.S. has shown little political will to defend Europe and use an alliance that it primarily funds and drives to maintain order globally. Statements from U.S. leaders, including President Trump’s criticisms of NATO members’ defense spending, underscore this shift, raising questions about the alliance’s future.
Possibility of U.S. withdrawal from NATO
A U.S. withdrawal from NATO – whether formal or de facto – represents a critical step in the resurgence of global isolationism. The U.S. is key to enhancing the alliance’s strategic capabilities, contributing to areas like nuclear deterrence, airlift operations, intelligence gathering, logistics and rapid response efforts. Without it, NATO would be left as a hollow structure, forcing Europe to confront the prospect of collective defense under significantly altered conditions.
France
France has the EU’s most advanced military capabilities, including an independent nuclear arsenal and global expeditionary forces. It has demonstrated the ability to deploy and sustain operations abroad, notably in Africa and the Middle East. However, despite this capacity for military projection, France lacks the scale needed to replace the U.S. in NATO. With limited manpower, budget constraints and a political environment that does not favor large-scale militarization, France cannot provide comprehensive continental defense, especially in high-risk areas such as Eastern Europe.
Turkey
Turkey has NATO’s second-largest military, with significant ground forces, a growing defense industry and ample regional operational experience. However, Ankara’s strategic priorities do not align closely with the defense of continental Europe. Its primary focus remains on the Eastern Mediterranean, the Middle East and its immediate neighborhood. Given its complex and often adversarial relationships with other NATO members, such as Greece and France, and its transactional approach to diplomacy, Turkey is unlikely to take on a leadership role in European defense or make meaningful contributions to deter threats on NATO’s northeastern flank.
Eastern Europe
A U.S. withdrawal would deliver a major security shock to Eastern European countries, especially Poland, the Baltic states and Finland. These nations have long relied on American guarantees to deter Russian aggression. Without such assurances, they would likely ramp up rearmament efforts, deepen bilateral ties with remaining military powers (especially the United Kingdom and France) and potentially form new regional defense arrangements. Poland, in particular, has already signaled its willingness to take on a more significant military role, setting ambitious defense procurement and spending targets exceeding 4 percent of its gross domestic product. While speculative, the possibility of a Polish nuclear program may no longer seem outlandish considering growing insecurity.
Germany
While economically powerful, Germany’s military is underdeveloped. Despite recent rhetorical shifts and a promised increase in defense spending following Russia’s invasion of Ukraine, the Bundeswehr continues to face structural inefficiencies, low readiness levels and political hesitation. Germany is not positioned to fill the leadership void left by the U.S., and its internal divisions, along with pacifist traditions, complicate the country’s efforts to adopt a more assertive defense posture.
Scenarios
Most likely: The U.S. significantly reduces engagement with NATO
In this first and most likely scenario, the U.S. does not formally leave NATO but sharply reduces its engagement. Under the pretext of strategic rebalancing, it would shift its military focus to the Indo-Pacific, reduce troop levels in Europe and scale back participation in joint exercises and NATO decision-making. Public rhetoric would emphasize that Europe must shoulder more responsibility for its defense, accompanied by cuts in U.S. defense spending for European operations.
The immediate effect is one of strategic ambiguity. NATO’s Article 5 would remain legal, but its credibility would be weakened. European allies, especially those on NATO’s eastern flank, may start to doubt the reliability of U.S. commitments. France might renew calls for European strategic autonomy, while Eastern European states might seek alternative security guarantees.
In this cooling-off scenario, NATO would formally survive but enter an increasingly hollowed twilight phase. The alliance’s deterrent value would diminish, and adversaries, particularly Russia, may test its resilience with hybrid threats or pressure campaigns.
Somewhat likely: U.S. functionally withdraws from NATO
In the second scenario, the U.S. could effectively disengage from NATO without invoking Article 13. This rule allows a member state to withdraw by providing formal notice to the U.S., with withdrawal taking effect one year later. America would close key military bases, withdraw nuclear weapons stationed in Europe, cease participation in the integrated command structure and declare that it would no longer contribute to collective defense planning or operations.
Although the alliance may exist in name, its functional core – the U.S. – would be gone, forcing Europe to fill the vacuum. Major European NATO members, limited by constrained capabilities and divergent priorities, would struggle to replace U.S. leadership. Consequently, NATO would lose its operational significance. The void cannot be filled quickly or cohesively, increasing fragmentation and the risk of strategic miscalculations.
Least likely: The U.S. formally leaves NATO by invoking Article 13
In the third and most dramatic scenario, the U.S. would formally withdraw from NATO by invoking Article 13. Washington would announce its exit from the alliance, stating that it no longer considers itself bound by NATO’s mutual defense obligations. A one-year withdrawal period would commence, during which U.S. troops and nuclear assets would be removed from Europe, and their roles within NATO’s command structures would be dismantled.
The consequences would be immediate and profound. NATO as an institution would collapse in practical terms, even if it continued to exist as a mere legal entity. France would emerge as Europe’s leading strategic actor, positioning its nuclear deterrent as the cornerstone of a revamped European defense strategy. Nevertheless, its aspirations would be limited by scarce resources and political divisions within the EU.
Without a cohesive European response, smaller regional alliances would begin to emerge. A Nordic-Baltic-Polish bloc may form around shared security concerns, while a Franco-German-led core would attempt to preserve what remains of collective European defense. Turkey would remain in NATO formally but increasingly pursue its own course. Some Central European states might lean toward neutrality or seek to forge closer ties with Russia.
This formal break would mark the definitive end of the postwar transatlantic security order. While Europe might eventually reconstitute its defense architecture, it would face years of strategic disorientation, vulnerability and heightened geopolitical risk.
Contact us today for tailored geopolitical insights and industry-specific advisory services.
Sign up for our newsletter
Receive insights from our experts every week in your inbox.
