US Policy Shifts and the Future of the Transatlantic Alliance.

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US Policy Shifts and the Future of the Transatlantic Alliance.
March 3, 2026 | David A. Gantz | bakerinstitute.org

Currently, the United States and Europe disagree on several fronts to such an extent that the post-World War II transatlantic alliance is significantly fractured. U.S.-Europe relations have reached a point where its recovery, if pursued, would be a difficult and lengthy process.

Why US-Europe Relations Are Shifting,
Recent developments in the economic, political, and military dimensions of U.S. relationships with Europe, including the European Union (EU) and the United Kingdom (U.K.), suggest that alliances fostered over more than a century are facing substantial and potentially unprecedented risks.

While the future is uncertain, diplomatic and economic shifts initiated by the United States since January 2025 indicate that mostly cordial transatlantic relations are phenomena of the past and may never be completely restored. Even if subsequent U.S. presidential administrations seek to mitigate detrimental features of the new U.S.-Europe relationship, the transatlantic alliance will remain significantly marked by this moment, with the possibility of a full recovery seeming unlikely.

Among other factors, near-constant changes in U.S. trade policies since January 2025 have eroded confidence in the robustness of the U.S. economic and legal systems and created uncertainties for domestic and international businesses and investors alike. Even without the U.S.’ intensified “America First” mercantilism under the Trump administration, an emerging new world order strongly suggests that America’s unipolar dominance is waning and will eventually, perhaps sooner than predicted, fade.

This issue brief examines the current state of the U.S.-Europe relationship and possible EU and U.K. responses to fluctuating U.S. policy. It explores two main questions:

Why is the transatlantic alliance unlikely to be fully restored in the coming years and thereafter?
Why would such a shift be highly detrimental for both Europe and the United States, now and onward?

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