On Donald Trump’s self-declared “Liberation Day,” the U.S. president liberated the United States from the stability and predictability that have underpinned its global economic hegemony.
The fact that the safety of U.S. bonds and the dollar came into question so quickly after Trump’s tariff announcements has upended the fundamentals of American and, by extension, Western hegemony.
The bullish U.S. outlook that dominated the World Economic Forum in Davos just three months ago shows how unexpected this blowback was. While everyone knew Trump was serious about his tariff policy, America’s untouchability was so deeply entrenched that very few seem to have priced in the extent of the possible fallout.
The blanket tariffs directed at friend and foe alike—with the notable exception of Russia—topped two months during which the U.S. administration unleashed a cyclone of aggression mainly targeting America’s allies and partners. It launched assaults on the sovereignty of two NATO allies: Canada and Denmark. It attacked democracy and free speech in at least three other NATO allies: Germany, Romania, and the UK. It paused intelligence sharing with Ukraine while adopting a few of Russia’s talking points on the war it started against Kyiv not only in 2022, but also in 2014.
Trump has thus turned the United States from the West’s most reliable and lucrative asset into its biggest liability—and vulnerability. But the driving forces behind this unparalleled sea change are not unique to the United States. The same discontent with economic liberalism is upending liberal democracy and cohesion in Europe too. And, if left unaddressed ahead of the AI transformation, this turmoil risks becoming one of the determinant features of the new Western disorder taking shape.
For Europe, it is at once a perfect economic, security, and geopolitical storm of generational proportions, and an opportunity to reset the terms of the transatlantic bargain, stem the rise of illiberal populism, and emerge as a real power.
Even the U.S. invasion of Iraq under false pretenses in 2003 and the wrecking ball chain reactions it unleashed from the Middle East to Europe, with its durable weakening of the international legal system, might pale in comparison.
At a time of unprecedented Chinese competition, Trump’s policies are simultaneously severely weakening the twin fundamentals of American—and by extension Western—global dominance: its economic exceptionalism and the transatlantic alliance. This is the kind of turmoil the West has been immune to, despite previous considerable crises, because the United States had managed to remain a stable stalwart on fundamentals for eight decades.
No more. The dramatic shift in global perceptions of the United States has been best encapsulated in the steep drop in the number of European tourists heading across the Atlantic in 2025, for fear of lack of due process and invasive searches.
Recent polling in Europe shows the cratering of U.S. soft power, one of the country’s most enduring and effective assets.
Favorable attitudes toward the United States have fallen by between six and twenty-eight percentage points compared to the end of 2024, according to a YouGov poll published in March. In Denmark, Italy, Spain, Sweden, and the UK, countries with traditionally high pro-American sentiment, these are the lowest figures for USA favorability since YouGov began tracking this question in November 2016.
And more than 60 percent of respondents in Belgium, Denmark, France, Germany, Italy, the Netherlands, and Spain, think Trump’s election makes the world less safe, according to a poll by the French think tank Groupe d’Études Géopolitiques.
But while the West—including the battered transatlantic alliance—is down, it is far from out. Trump’s most extreme policies are not supported by a majority of Americans. In fact, most U.S. Republicans still support both foreign trade and defending allies’ security.
A March 2025 Gallup poll shows that 59 percent of Americans think “defending our allies’ security” should be a foreign policy priority—including 54 percent of Republicans—and 65 percent support working through NATO to do it—though only 41 percent of Republicans.
Perhaps most interestingly, while discontent with the economic situation and political system carried Trump to victory, the percentage of Americans who consider foreign trade as an opportunity for economic growth has jumped twenty percentage points since 2024. This percentage is now up to 81 percent—including 78 percent of Republicans— while those seeing it as more of a threat to the U.S. economy has fallen by half, to 14 percent.
In Europe, the EU is benefiting from the chaos with a historic level of approval since the Eurobarometer started measuring it in 1983.
On average, 51 percent of Europeans see the U.S. as a “necessary partner” rather than an ally—22 percent—according to an European Council on Foreign Relations poll. This could indicate that the general population is more ready than its leaders to undertake an overhauling of the transatlantic alliance, while maintaining it.
And herein lie the real stakes. The alliance in its current form, and the unfettered globalization that has driven the world’s growth since the end of the Cold War, have run their course. Populations on both sides of the Atlantic have been signaling their dissatisfaction with what the system has delivered.
As the world is on the cusp of AI transformation, which promises to be one of the most disruptive revolutions yet, the answer cannot be autarky, trade barriers, and the dismantling of the world’s most successful alliance.
The goal should not be to reshore “the army of millions […] of human beings screwing in little […] screws to make iPhones” as U.S. Commerce Secretary Howard Lutnick said. It should be to rebalance and leverage transatlantic cooperation to minimize the amount of people at risk of being left behind by the upending of the economy that AI and machine learning promise to deliver. To date, North America and Europe together remain the economic and innovation leaders of the world, but that advantage can be quickly lost, as the events since Liberation Day showed.
