Transatlantic relations are caught in a dangerous downward spiral. The dynamic increasingly resembles the classic game theory scenario of the “prisoner’s dilemma,” in which two parties are better off cooperating — both individually and collectively — yet gravitate toward a worse outcome because each fears the other will undercut its interests. What should be a win-win equilibrium instead devolves into a lose-lose cycle of action and reaction.
This marks a profound departure from recent reality. Only a few years ago, after Russian tanks rolled across Ukraine’s northern border in February 2022, the transatlantic community was as united as it had ever been. Ukrainian flags hung from windowsills from Seattle to Tallinn. Allied leaders pledged to help Ukraine defend itself against Russian aggression. In April 2022, just months into the war, the United States established the Ukraine Defense Contact Group (UDCG), a coalition of 50 like-minded democracies organized to arm Ukraine. Allies divided responsibility across eight “capability coalitions” — air force, artillery, drones, and others — channeling a combined $89 billion in security assistance to Kyiv in the UDCG’s first two years alone.
That unity began to fracture in 2025. Under the Trump administration, Washington stepped back from its leadership role in the UDCG and cut military assistance to Ukraine, choosing instead to position itself as an equidistant mediator between Moscow and Kyiv. At the U.N. General Assembly, the United States voted against its European allies and Ukraine, siding with Russia, North Korea, and Belarus — ostensibly to preserve a U.S. mediating role. The “Liberation Day” tariffs on April 2, 2025, the literal red-carpet treatment of Vladimir Putin in Alaska that August, and persistent American recriminations over the European Union’s digital policy introduced further friction into the relationship.
But even these were only contributing factors. It was the Greenland crisis of January 2026 that truly tore the paradigm of transatlantic cooperation off its moorings. For most Europeans, the Trump administration’s designs to take over Greenland were surreal – the United States already had, and still has today, a substantial military presence on the island, working in cooperation with Greenland and Denmark, not against them, and the two had offered to expand joint security arrangements.
Indeed, the United States had long been seen as the linchpin of NATO’s collective defense; its threats against Greenland’s sovereignty transformed it, in many European eyes, into something closer to a predatory power. At the Munich Security Conference in February 2026, German Chancellor Friedrich Merz warned of a “deep rift” emerging across the Atlantic. It’s a view confirmed by public opinion – by February 2026, about one-fifth of respondents in the U.K., Germany, France, Italy, Spain, and Poland have come to regard the United States as a “major threat” to their security. Politicians who pushed back against Washington — Spain’s Pedro Sánchez, Canada’s Mark Carney, Denmark’s Mette Frederiksen — saw their approval ratings rise.
Iran War Opens New Fault Line
Just as the Greenland crisis was fading from the headlines, the U.S.-Israeli war against Iran opened a new fault line, undertaken with zero consultation with Persian Gulf partners, much less with Europeans. When several European countries questioned the war’s justification under international law and declined to grant blanket access, basing, and overflight rights, President Donald Trump castigated NATO as a “paper tiger” and suggested he was considering withdrawing the United States from the Alliance altogether. European leaders and publics chafed not only at the lack of prior consultation, but at the mounting economic fallout. Oil prices have risen approximately 50 percent, particularly hitting Europe and Asia, and forecasters warn of a stagflationary supply shock for Europe that could persist well into the future. Many EU leaders are bracing for recession.
For all these reasons, the politics on both sides of the Atlantic are now primed for noncooperation. Across the European political spectrum — from far left to even the far right, which the Trump administration has supported — politicians see little to gain from supporting transatlantic cooperation. In the United States, administration officials continue to disparage Europeans as “free-loading.” In April, U.S. Under Secretary of Defense Elbridge Colby reportedly outlined options for “punishing” NATO allies that failed to back America on Iran, including expelling Spain from NATO and reconsidering U.S. support for British sovereignty over the Falkland Islands.
The real danger is that this prisoner’s dilemma becomes institutionalized. Some policies can be reversed by a future administration, but others will lock both sides into a path of adversarial competition that may prove very difficult to undo. Washington’s announcement that it will withdraw 5,000 troops from Germany and cancel plans for episodic deployment of a long-range fires battalion came shortly after Chancellor Merz opined that Iran was “humiliating” the administration. In response, former Swedish Prime Minister Carl Bildt — a committed transatlanticist — suggested that Europeans might “demand a corresponding reduction” in U.S. bases tied to non-NATO operations. That response is understandable as a means of establishing leverage, but it typifies the action-reaction spiral that leaves both sides worse off. If the U.S. reduces its NATO force posture and consequently loses facilities critical to its global power projection, both sides suffer. And the damage is hard to undo — once an entire military base is shut down and repurposed, it is unlikely ever to be rebuilt.
Equally stark is the emerging debate over NATO’s command structure. After American officials repeatedly told their European counterparts that Europe should manage its own conventional defense, it is understandable that European capitals would begin exploring what a European-only defense in an Article 5 scenario might look like. EU Vice President and High Representative Kaja Kallas noted at the recent European Political Community summit in Armenia that the U.S. troop withdrawal announcement “shows that we have to really strengthen the European pillar in NATO.” French President Emmanuel Macron went a step further, declaring that “Europeans are taking their destiny into their own hands, increasing their defence and security spending, and building their own common solutions.”
If Europeans genuinely concluded that the United States would not participate in the defense of an ally, this could over time produce demands that the Supreme Allied Commander Europe (SACEUR) billet be filled by a European flag officer rather than an American, that European-only operational plans be developed (within NATO or outside of it), and that European-only exercises be conducted to prepare for contingencies without the United States. None of these decisions could easily be walked back — billets, plans, and exercises create structural path dependencies. Preparing for a scenario in which Europeans fight alone is a logical precaution; but it would set in motion a cascade of institutional choices that make reversal progressively harder.
Similar Dynamics in Economics
A similar dynamic is unfolding in the economic domain. European governments are moving to develop local alternatives to U.S. hyperscalers in cloud computing, business software, and social media. In a cooperative world, European companies would carve out highly profitable niches within the technology stack — much as they have with advanced semiconductor manufacturing — synergizing with American firms rather than competing against them. In a non-cooperative world defined by fear of American-installed kill switches, backdoors, and poisoned models, European consumers will pay far more for duplicating what American products already offer. American tech companies, meanwhile, stand to lose significant European market share.
These shifts are already underway. The German state of Schleswig-Holstein has developed its own open-source business software and messaging system to replace Microsoft products, and some employees have moved to open-source Linux-based computers no longer dependent on Windows. The effect remains localized for now, but after the United States imposed sanctions on ICC Chief Prosecutor Karim Khan and former EU Commissioner Thierry Breton that may limit their access to American software and financial services, calls for digital and financial sovereignty have grown louder across the continent.
In critical minerals, transatlantic cooperation could benefit both sides by building secure supply chains among allies who individually lack sufficient processing capacity to reduce their dependency on China. By pooling risk, creating economies of scale, and maintaining commercial viability through shared throughput, such cooperation could reduce price volatility, diminish China’s coercive leverage, and assure supply for both defense and civilian production. A beggar-thy-neighbor approach, by contrast, would leave both sides duplicating capabilities, competing for access to the same resources, and gradually pulling apart trillion-dollar supply chains.
The same logic applies to foreign policy. When Europe and the United States act in concert on shared challenges — whether pursuing a durable peace in Ukraine or limiting the spread of Chinese telecommunications technology — their combined weight far exceeds what either can achieve alone. Disagreements over how to pursue common goals are normal and can be managed; but a sustained failure to coordinate on sanctions, export controls, tariffs, or even on war will erode the institutional habits and trust that make future coordination possible.
Divides Becoming Structural and Permanent?
In short, Europe and the United States are each laying the foundations for their own geopolitical futures, and the danger is that those foundations diverge in ways that cannot later be reconciled. What is today an episodic prisoner’s dilemma risks becoming structural and permanent.
Theoretical modeling and empirical analysis alike have shown that the solution to the prisoner’s dilemma is to build a long-term relationship of trust, so that the benefits of cooperation become self-reinforcing. This is precisely the approach the United States and Europe took for most of the period since World War II. Through NATO, they pooled security risks and adopted collective defense commitments that made the alliance stronger than the sum of its parts. Through a dense web of trade and investment, they grew the transatlantic economy to a staggering $9.5 trillion annually, lifting living standards on both sides of the Atlantic. Through travel and familial ties, their societies grew genuinely intertwined.
Today, political pressures on both sides are rapidly dismantling the cooperative framework that produced these extraordinary gains, and the cascading effects risk setting in motion a competitive dynamic that could be not only harmful but deeply entrenched for years to come. To be clear: less reliance on the United States and more strategic autonomy for Europe can be good for both sides. More equitable burden-sharing in defense is likely to produce a much stronger European defense industrial base. A stronger and more bankable European tech ecosystem will strengthen competition. And eliminating single points of failure will make supply chains more resilient.
The key, however, is not to foreclose future cooperation because of current recrimination. A brief transatlantic “separation” can help both sides rethink the strategic stakes more clearly as they rebalance unsustainable dependencies. In doing so, they must avoid a messy breakup that risks undoing decades of cooperation.
