From NATO To Trade Wars: Lasting Impact Of Trump’s Transactional Diplomacy

By M. A. Hossain & Vishakhajha

For decades, U.S. alliances have been the backbone of global stability, fostering economic cooperation and collective security. NATO, economic partnerships with European and Asian allies, and engagement in international organizations have cemented America’s leadership in world affairs. However, under Trump’s second term Presidency, these traditional alliances came under significant strain. His “America First” approach represented a dramatic departure from the multilateralism that had defined U.S. foreign policy for decades, favouring a more unilateral and transactional approach.

Trump’s administration took a “Realist” stance, prioritizing national sovereignty, economic self-interest, and security over diplomatic cooperation. While “Realism”, as a school of international relations, underscores the role of power and self-preservation in an anarchic global system, Trump’s application of this principle went beyond pragmatic statecraft. His scepticism of NATO, confrontational trade policies, and direct engagement with authoritarian leaders reshaped America’s global standing and tested the resilience of long-standing alliances. This shift raised fundamental questions about the future of the international order and whether the damage to these partnerships would be lasting.

Trump viewed alliances not as enduring commitments based on shared values but as transactional relationships in which the United States should only participate if they provided immediate national benefits. His administration’s approach to international agreements underscored this perspective. In 2017, he withdrew the U.S. from the Paris Climate Agreement, arguing that it placed unfair economic burdens on American taxpayers while giving competitive advantages to countries like China. European allies, who had invested diplomatic capital in the deal, saw the move as a retreat from global leadership and a signal that the U.S. was no longer committed to cooperative solutions for pressing global issues.

The following year, Trump further alienated European allies by withdrawing from the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran Nuclear Deal. The agreement had been a diplomatic achievement that involved the U.S., the European Union, and other key players in curbing Iran’s nuclear ambitions. Despite European objections, Trump unilaterally pulled the U.S. out, citing concerns over Iranian compliance and the agreement’s perceived shortcomings. This move deepened transatlantic tensions, forcing European nations to scramble to salvage the deal without U.S. support. The decision reinforced the notion that the U.S. was becoming an unreliable partner, willing to abandon agreements negotiated in good faith.

Nowhere was Trump’s scepticism toward alliances more apparent than in his approach to NATO. Since its founding in 1949, NATO has been a pillar of U.S. and European security, ensuring a collective defense against external threats. However, Trump repeatedly criticized the alliance, arguing that the United States was disproportionately shouldering its costs while European members failed to meet their financial commitments. His administration focused heavily on the 2% GDP defense spending target that NATO members had agreed upon, using it as a metric to question the alliance’s effectiveness.

While previous U.S. administrations had also encouraged greater burden-sharing, Trump’s rhetoric was uniquely confrontational. Pete Hegseth, the US secretary of defence, left European defence ministers in shock during a meeting in Brussels on February 12, 2025, as he unequivocally stated that European security is no longer a primary focus of the United States. French President Emmanuel Macron, who began advocating for greater European defense autonomy. Macron even proposed the formation of a “true European army” to reduce reliance on the U.S. for security.

Trump’s questioning of NATO’s value aligned with the ‘Realist’ perspective that alliances should be conditional and serve immediate national interests. However, this stance also undermined trust in U.S. leadership and introduced uncertainty among allies. The long-term strategic consequences of Trump’s NATO skepticism were significant. By casting doubt on America’s commitment to transatlantic security, he emboldened adversaries such as Russia, which has long sought to exploit divisions within NATO. The instability created by his rhetoric encouraged European nations to rethink their security strategies, though efforts to establish a more independent European defense force faced significant political and economic hurdles.

rump’s trade policies further strained U.S. relations with key allies. His belief in economic nationalism—viewing trade as a zero-sum game—led to tariffs, renegotiations, and disputes that disrupted longstanding agreements. His administration imposed tariffs on steel and aluminum imports from the European Union, Canada, and Japan, citing national security concerns. The decision triggered swift retaliatory measures, escalating tensions and undermining the trust that had defined transatlantic economic relations.

At the same time, Trump launched a trade war with China, imposing tariffs on billions of dollars’ worth of Chinese goods. While this policy was aimed at countering Beijing’s economic rise, it had unintended consequences for U.S. allies. European nations and Asian partners, who had complex trade relationships with both the U.S. and China, found themselves caught in the middle of a growing economic conflict. Rather than building a unified front to challenge China’s influence, Trump’s approach created rifts within the Western alliance, weakening the effectiveness of a collective economic strategy.

One of Trump’s most consequential trade decisions was withdrawing the U.S. from the Trans-Pacific Partnership (TPP), a trade agreement designed to counterbalance China’s economic expansion in the Asia-Pacific region. Regional allies such as Japan and Australia had viewed the TPP as a critical component of economic and strategic cooperation. Without U.S. participation, the remaining member states moved forward with a modified deal, reducing American economic influence in the region and leaving a vacuum for China to fill.

Trump’s foreign policy also reflected a deep skepticism toward international institutions. He frequently dismissed multilateral organizations as bureaucratic and ineffective, favouring direct negotiations and unilateral actions. A striking example of this came in 2020 when he withdrew the U.S. from the World Health Organization (WHO) during the height of the COVID-19 pandemic. Citing the organization’s alleged bias toward China, Trump cut American funding like USAID and withdrew from global coordination efforts. His decision was widely criticized by allies, who saw it as an abdication of U.S. leadership at a critical moment. While Trump framed the move as a defense of national sovereignty, it reinforced the perception that the U.S. was disengaging from international cooperation, further isolating itself from global partners.

Another defining feature of Trump’s foreign policy was his engagement with authoritarian leaders, prioritizing strategic and economic interests over democratic values. His administration pursued direct negotiations with President Putin or previously North Korean leader Kim Jong-un, marking an unprecedented level of dialogue between the two nations. While these summits reduced immediate tensions, they yielded no concrete agreements, raising concerns about their long-term effectiveness.

Trump’s presidency significantly altered America’s relationships with its allies, embracing a ‘Realist’ approach that prioritized national power, economic self-interest, and unilateral decision-making. While his policies—such as pressuring NATO allies to increase defense spending—aligned with some longstanding U.S. concerns, his confrontational approach weakened diplomatic trust and created greater global uncertainty. (IPA Service)

By arrangement with the Arabian Post