US allies pull back amid Trump policies, $132 bn cost to America

Former US Deputy National Security Adviser Jon Finer warned that countries across Europe, Asia and the Middle East are reducing reliance on the United States because of President Donald Trump’s policies, describing it as a “global grand strategy of countries distancing themselves from the world’s most powerful nation.”

He cited the NATO summit in Ankara where Trump threatened allies Denmark and Spain, noting that European governments are expanding defence, energy and technology sectors while diversifying relations. Europe raised its military budget by 14 % to $864 bn in 2025 but cut purchases from US defence firms by roughly half.

Economic consequences include higher fuel and fertiliser prices that Moody’s estimates cost American consumers $132 bn, a drop of four million international visitors in 2025 costing over $8 bn, and a 17 % decline in foreign‑student enrolments costing US universities at least $1 bn.

The shift is also evident in Asia and elsewhere: India is deepening commercial ties with Europe, the Middle East and, reluctantly, China; Canada has launched a new strategic partnership with China and joined a €150 bn European defence fund; Japan is boosting offensive capabilities and South Korean arms makers are replacing US suppliers.