The New Transatlantic Bargain

When debating U.S. grand strategy, foreign policy elites often frame alliances as either a legacy asset or a growing liability. They are presented either as the enduring, indispensable pillars of global order or the costly remnants of a bygone era of American primacy. Both perspectives miss the new reality. The question today is not whether alliances matter. It is how they should adapt to a world in which American power is eroding, geopolitical competition is intensifying, and U.S. allies are growing more autonomous.

Even if the future of alliances is in flux, the importance of the United States’ international relationships has not diminished. On the contrary, its network of alliances remains the United States’ single greatest strategic advantage over its Chinese and Russian rivals. China has no allies, with the sole exception of North Korea—only “partnerships.” Russia has a handful of dependent client states, whereas the United States has more than fifty treaty allies. That network of alliances enables the United States to project power, coordinate policy, and maintain legitimacy in ways that it could never accomplish unilaterally.

But the nature of those alliances will have to change if they are to endure. They will have to become more reciprocal, more selective, and more grounded in capabilities, because the old model of asymmetric dependence is no longer politically sustainable. Having grown weary of being treated as mere junior partners, U.S. allies are ready to carry more of the burden. They are increasingly becoming strategic actors in their own right.

The challenge is most acute for the transatlantic alliance. For decades, the United States and Europe operated under a clear bargain. Washington provided security and its European allies gave their loyalty. That arrangement underpinned the most successful partnership in modern history. But it depended on assumptions—about U.S. reliability, shared threat perceptions, and a broadly liberal international order—that no longer hold.

The erosion of American primacy predated President Donald Trump. It was driven by the diffusion of global economic power, the rise of Chinese influence, and the costs of two decades of war and financial crisis. Trump’s return to office has persuaded European leaders that the United States, though still indispensable, is no longer reliable. At the same time, domestic political shifts on both sides of the Atlantic have weakened cooperation on everything from trade policy to democratic norms. Consequently, Europe is focusing on the development of military capacity, defense-industrial scale, energy resilience, and geoeconomic leverage. Although that process remains incomplete and politically contested, the direction is clear. A stronger Europe should be understood in Washington as a favorable development—not a loss of American control, but instead, a change that makes the alliance more sustainable over time.

A looser, more transactional, but also potentially more resilient system is emerging. The United States will remain the anchor of European security, but Europeans will do far more for themselves. Cooperation across the Atlantic will extend beyond traditional defense into areas such as technology, trade, infrastructure, and critical supply chains. And coalitions will increasingly form within alliances, rather than through them, allowing for more flexible and targeted cooperation.

Such a system will be less cohesive than the Atlantic alliance of the past. It will involve more bargaining, more divergence, and more friction. But it could also prove more durable precisely because it is better aligned with the realities of a more transactional world. The alternative—trying to restore an outdated model of dependency—would likely produce frustration on both sides of the Atlantic and weaken the alliance over time.

That beneficial trajectory is far from guaranteed, however. It depends on a stable Europe, which cannot be taken for granted. It is entirely plausible that nationalist and far-right forces will soon gain power in France or the United Kingdom—but rather than strengthening transatlantic ties, such governments would likely turn inward, resist collective commitments, and pursue more opportunistic relations with great powers, including China and Russia. Meanwhile, Germany is facing prolonged political instability that could prevent it from providing steady leadership. In such a world, transatlantic coordination would become more difficult and less reliable. If that happens, U.S. grand strategy will have to change. The task would be to preserve strategic coherence in a weaker and more divided Europe.

In that scenario, NATO would become even more central as the primary framework for deterrence and military coordination, despite ongoing questions about U.S. commitment and the alliance’s ability to reach consensus. At the same time, the United States would need to rely more heavily on coalitions of capable and willing allies within Europe, particularly among those countries that remain politically committed and militarily serious. Rather than bypassing NATO, such groupings would increasingly operate within it, allowing Washington and its partners to act even when full consensus across a more divided alliance proves elusive.

At the same time, American strategy would need to become more pragmatic in that case. Political convergence with European allies could weaken, particularly on issues such as trade, regulation, and relations with China. But the United States would need security cooperation even in the absence of full alignment. The goal, in that darker scenario, would not be to restore European unity but to prevent further fragmentation that could undermine the broader Western alliance system.

Those two futures—a more autonomous Europe within a rebalanced alliance or a more fragmented Europe requiring selective engagement—highlight the central dilemma facing U.S. policymakers. In both cases, alliances remain indispensable. But their form, function, and underlying logic differ significantly from those of the past and from each other.

The adjustment will be tough. A more autonomous Europe will resist American pressure, chart its own course on economic and regulatory issues, and seek greater control over its own security and industrial policies. But the alternative—a weaker, more dependent, and more politically unstable Europe—would be far more damaging to U.S. global interests.

Alliances have always been about more than alignment. They are about shared interests, mutual adaptation, and the recognition that collective strength exceeds what any country can achieve alone. That logic still holds. But the United States now needs to apply it in very different global conditions, under which the country’s interests will undoubtedly be better served with strong and capable partners—rather than weak and dependent ones.