The idea that the United States has been swindled by its Nato allies is not new. Robert Gates, in his valedictory address as secretary of defence in June 2011, warned bluntly that future American leaders might not consider the return on defence investment in Europe worthwhile. He spoke of a ‘two-tiered alliance… Between those willing and able to pay the price and bear the burdens of alliance commitments, and those who enjoy the benefits of Nato membership… but don’t want to share the risks and the costs.’ Gates was no populist. He was a career intelligence officer and establishment Republican, and his warning carried real weight precisely because it came from inside the institutional consensus rather than against it.
Trump’s fury at Europe’s refusal to support his Iran campaign is, in this sense, the loud arrival of a grievance that had been building for more than a decade. The complaint has a surface plausibility: the United States accounts for roughly two-thirds of total Nato defence expenditure, and until very recently most European allies fell well short of the 2 per cent of GDP spending guideline agreed at the Wales summit in 2014. By 2025, all 32 members claimed to meet the target, but this is a recent and, in some cases, cosmetic achievement. Spain, the most conspicuous laggard, has been openly defiant. The raw numbers invite the conclusion that America has been paying for Europe’s security while Europeans spent the peace dividend on welfare and early retirement.
However, in many ways this framing is wrong, and dangerously so. Nato has never been a protection racket, with the United States as an exasperated service provider and Europe as an ungrateful client. This is not how the alliance has functioned, nor is it why the United States built and sustained it.
From its inception, Nato was an instrument of American grand strategy. Its primary purpose during the Cold War was to contain the Soviet Union. But its secondary purpose, less discussed and arguably more consequential for the long-term shape of international order, was to pacify European geopolitics. The United States did not simply defend western Europe. It suppressed the security competition that had produced two catastrophic wars in 30 years. By extending its nuclear umbrella and stationing troops across the continent, Washington made it unnecessary (and, over time, unthinkable) for France and Germany to balance against each other, for smaller states to seek protection through rival alliances, or for any European power to develop the kind of autonomous strategic capability that might one day challenge American primacy.
This was not American altruism but rather the structural self-interest that arises when you design the system’s rules to reflect your own strategic interests. America’s strategic overwatch in Europe delivered several things simultaneously. It eliminated the prospect of a rival power bloc emerging on the continent. It gave the United States extraordinary, if often invisible, leverage over European political choices, from trade policy to monetary integration to the management of the post-Cold War eastern enlargement. And it created the conditions for an integrated transatlantic economy built on open markets, liberalised capital flows, and broadly convergent regulatory norms.
The European Union itself, for all its self-image as a sovereign continental project, is more accurately understood as an American-enabled creation: encouraged, shaped and underwritten by the military stability that only American presence could guarantee, and designed in no small part to replace the patchwork of national regulations and market barriers that had long frustrated American commercial access to European markets.
Europeans, for their part, were happy to accept this arrangement and traded strategic autonomy for prosperity and domestic political space. Small defence budgets were justifiable, especially in the heady days of American unipolarity and the post-Cold War globalised ‘end of history’. To see the Europeans as freeloaders is to misunderstand the bargain. Europeans were not cheating the system but living inside it, on terms that suited both them and Americans for more than half a century.
What Gates identified in 2011, and what Trump has now made explicit, is that the American domestic consensus sustaining this arrangement is fracturing. The question is whether the fracture reflects a rational reassessment of costs and benefits, or a fundamental misreading of what the alliance was for. Trump’s rhetoric suggests the latter. When he describes Nato as a ‘paper tiger’ and demands that allies support the Iran war, about which they were never consulted, he is treating the alliance as though its purpose were to supply auxiliary forces for American military adventures. That was never the deal. Nato’s value to the United States lay not in what Europeans could contribute to expeditionary operations in the Middle East, but in the structural pacification of a continent whose internal rivalries had twice drawn America into world wars.
Gutting Nato is spectacularly crude
The more serious version of the retrenchment case, advanced by offshore balancers and Asia-first realists in Washington, holds that American strategic attention must now concentrate on China and that Europeans should therefore take primary responsibility for their own neighbourhood. As a proposition, this is not unreasonable, and European strategic lethargy has been real and indefensible. But gutting Nato is a spectacularly crude way to manage that transition.
If Nato is genuinely hollowed out or abandoned, the consequences will not only be confined to higher European defence budgets or a potentially more assertive Russia, but will also include the re-emergence of competitive European geopolitics, the erosion of American influence over European economic and regulatory choices, and the slow disintegration of the transatlantic market order that has underpinned American commercial power for decades.
A cost-benefit analysis of Nato was long overdue, and the European powers have dilly-dallied for far too long on defence, but Senator Tim Kaine is right to note that withdrawing from Nato would be ‘national self-sabotage’. He understates the case, however. It would not merely weaken American security. It would liquidate one of the most successful instruments of grand strategy any power has ever constructed, and it would do so on the basis of a ledger-book grievance that mistakes the cost of hegemony for the price of charity.
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