So, what happens next?

[Starfox]

Because this discussion will come at some point, we all know it. Assuming America got a new president in 3 years or that it successfully gets rid of Trump before that, and that's assuming that Trump and his band of merry idiots won't find a way to get a third term, what then?

The sad reality is that we won't be going back to what was. Too late for that. For those who still think that a new US president will fix things and that we'll be back to business as usual, that won't happen.  Trump initiated (not that he really wanted it, as usual it was mostly an accident because his policies suck) very huge changes in Europe, changes most Americans have no idea are happening because the American media won't talk about them. Trump wanted to break Europe and he obtained exactly the other result. He cemented Europe against a common enemy, himself. But the most important changes are often the things you don't see and here's two:

A) Europe is re-arming, it might not be that hidden, I assume everyone knows it by now. It might have seemed like a good idea to Trump because there was the prospect of selling a huge amount of American military hardware to Europeans. That's not happening. There are a bunch of reasons for that but mainly, buying American now, with a president that doesn't even respect a single treaty or commercial contract is suicidal, at best. The Swiss know that perfectly well. See, they decided to buy F35s for a total sum of 19 billion USD under Biden. But now, Biden is not president anymore, so it was decided that the Swiss were going to pay (additionally to the already signed contract which indicates a fixed price), 8 billions more because "things change". No, things don't change. There was a signed contract and Trump should abide by its terms, it doesn't matter if was signed under another president, Trump represents the US not himself. But he won't abide by the terms of the already signed contract because he's a greedy jerk and he wants that money, likely going directly in his pocket. The problem here is trust. How can you do business with a guy like that? The answer is simple: you don't.

Imagine buying a new car. You sign a contract, you paid the agreed sum of money, and you wait for the delivery a few weeks later. But the day you go to get your brand new car, the seller go "There were unforeseen costs so now you have to pay 70% more, or you won't get the car, thank you very much". How would that make you feel? Good? What happened to the Swiss is a cautionary tale for all other European countries. That was the final nail in the coffin regarding a F35 deal for Spain which decided to switch to alternatives, probably less fancy but way more "financially" reliable. That is understandable, no one likes to do business with a con artist. European countries that already bought American because under Obama and Biden that seemed like a valid idea, realize now that it's a mistake putting them at risk in a world were American policy is increasingly unstable. Buying American currently is not a smart decision (not even mentioning that a US administration can very easily paralyze a foreign military that is using its hardware just by refusing to provide parts for maintenance -- which is the reason why the US insists to keep control of the maintenance in all of its military contracts, even refusing in some cases to form foreign personnel to maintain the weapons; no "kill switch" needed, US control is already in the fine prints, and that policy predates Trump by several decades, most of Europe went along with it anyway because it was "friendly". That's no longer the case. So Europe rearmament will happen without the US industry. That is several trillions USD worth of deals that thanks to Trump, won't make it to the US, and I probably don't need to tell you about the cost in jobs.

B) However, Europe rearmament triggered another conundrum less visible. Because of the circumstances, we need it to happen fast (remember we've a real war going on on European soil) and for that, we need money. Well we have the money but most of it is in investments so it's not money that we can spend immediately (and again, we are talking trillions -- Euros this time).

So French president Macron, just this week, presented an idea to the rest of the European leaders: starting to issue European bonds (treasuries) in euros. A year ago, everybody would have laughed him off but now, no one is laughing. They listened without a pip and no one said no. No one said yes either but that's a firm "we need to really think about that because realistically what are the other options? And if we're going to do this, now is the right time". And that should terrify the American economy. Why? Because right now there is a real need from other countries outside Europe to distance themselves from the US and the dollar simply because the US is not seen as the predictable and reliable partner it once was, and there is a cost doing business with someone who puts greed before honoring contracts. Financial trust has been lost and worldwide goodwill toward America is smelting like snow in Spring. If Europe starts to issue bonds in euros, there will be a lot of takers, mainly in the private sector, because unlike the US, Europe is seen as predictable and trustworthy and investors know that the Euro has been undervalued anyway. Today €1 = US$1.19 a month ago it was US$1.16, but I have known a time when it was US$1.54 before the EU decided to bring it down a notch because having a currency too strong is not really a good thing for export (heck, at some point I was buying stuff directly from the US because it was less expensive than buying it at home, even with the shipping costs from the US added). And how did Europe manage to get the Euro down? By investing even more in American treasuries, bringing the dollar up and the euro down to a level that was OK for the European economy, between 1.10 and 1.15 dollar per euro.

Euro bonds would trigger nasty effects in American markets. Investors like Warren Buffet predicted that something of the sort would happen with Trump and that investors would be well advised to carefully monitor the Euro in the coming years but they may have underestimated how fast it would happen. We're not talking in decades anymore here but months. By 2030-35 Europe must have built a military strength capable of facing, alone, any threat coming in from any foe. This is the goal. This goal requires European countries to push military spending to 5% of GDP which is double the typical military spending for Europe. This goal has to be financed and Euro bonds seem like a very logical way to go.

I guess that Trump gave us a (welcomed) kick in the ass and now it's to Europeans to do the rest, without him and without the US because we don't have time to wait for a new more stable and less lunatic president and quite simply, Europe doesn't trust the US anymore. So the whole system has to be redesigned around Europe and a few trustworthy, reliable and predictable external partners like Canada, Australia, Japan and South Korea (all in need of distancing themselves from America too, Australia because the AUKUS deal is a pure joke, Japan because it doubts the sincerity and involvement of the US in the Pacific -- quite correctly as Trump doesn't see the Pacific as part of his "sphere of influence", not enough real estate there, I suppose, I can imagine him saying "it's just water!" --, South Korea because it perceives a realignment of the US government with regimes like the one in North Korea, and of course Canada because... well we all know that Canada got even more punches from Trump than Europe during the past year).

Think about that: why does the US has the most powerful military (1 trillion USD per year) in the world? Because until now it had allies worldwide willing to foot the bill by financing (via treasuries) the US unprecedented national debt. If Europe starts to issue treasuries in Euro to finance its own defense, reducing dollar power as a reserve currency and, who knows, replacing it in a few years, the US may be forced to cut its military down by a lot because it won't have the money to afford it anymore -- and countries like Putin's Russia will have exchanged the distant US problem for another one much closer to home.

The two examples above are just to show you how deep changes initiated in Europe are running and, because of that and their speed, how irreversible they are. And I spare you the current talks about nuclear weapons. It's another things European countries are thinking about that should terrify everyone, including, surprisingly, Europeans themselves. I'm European, born in France, at a time when my country already had nuclear weapons so they never really gave me a cold sweat, but even I find some of the lines of thought here particularly scary. And why are we even talking about that in Europe? Because the majority of European countries feel that the US nuclear umbrella is worth as much as the word of the guys in Washington, meaning, very little, if anything at all. So there again, we need to build our own thing. And don't think that it's just France and the UK. At least four other European countries could develop nuclear weapons in just a few years -- even less if helped by countries who already have them -- because they already started programs a long time ago (unlike the UK and France, however, they just decided to not go to the weapon production phase, thinking -- clearly erroneously -- that the American umbrella was forever).

By the way, Germany just announced the opening of discussions with France regarding the sharing of nuclear capabilities to get Germany out of the US deal on B61 gravity bombs; we already know that France is opened to discussions with other EU members about the form that could take a European nuclear umbrella, we just weren't sure that Germany was interested. Poland and the Baltics (Estonia, Lithuania, Latvia) also signaled interest and if you look at a map of Europe, one easily understands why. Anyway, that's a discussion for another time, but if you want a peek, here's a video on the topic:

So the question remains. What will be the place of the USA in the world once Trump is done? Because one thing I can tell you is that in any European discussion and decision currently happening about our future, the US is left out of the equation, like if it didn't exist because we are forced to think that way. Relying on the US for anything has become a no win scenario for most of its allies, Europe and Canada in particular. France, or more precisely Charles de Gaulle, realized that long before anyone else. Why do you think that France have been building 94% of its own military hardware since the 1970s and has its own nuclear weapons that don't owe anything to anyone? Yes, France is the oldest ally of the United States, we were there to assist in the birth of the nation, but we have never been totally blind to the flaws in that relationship, flaws that have been increasing after World War 2. France is not surprised by the new stance adopted by the US, disappointed but not surprised, and therefore it isn't the country in Europe that is the most properly pissed off by the events. Right now Denmark claims that spot (because of Greenland).

Another thing I can tell you, there will be no way back. Europe is engaged in such a massive effort of military transformation and spending that it won't be stopped just because there's someone new in the White House. The time to patch things up amicably is behind us. Like most US allies, after the first Trump term which was already rocky, Europe gave a second chance to the US, betting on the fact that the US would certainly not elect someone like Trump or worse, Trump himself, another time (yeah, we can be naive that way) and now that second chance has been burned. There won't be a third one at least not on the same terms.

There will be a way forward, certainly, but right now nobody could really say what it will be. NATO still exists and probably will continue but with, shall we say, a more equitable distribution of the tasks and powers, in simple words, America will stop to rule everything. We are in a world in which a country cannot survive alone no matter how big it is. Either it partners with others or it dies in its corner. Trump's idea of America's isolationism and "donroe" doctrine of spheres of influence might seem great to him and MAGA on paper, but it won't fly in real life. We're not in the 19th century anymore. So unless the US wants to spend the next decades in dozens of colonial wars across the Americas, wars that it won't be able to afford without support anyway (and it won't have it), I'd suggest Trump to revert course real quick but he doesn't care. The guy is a (self professed) genius after all.

Marco Rubio's recent speech at Munich (the same city were JD Vance happily trashed Europe last year, calling Europeans losers and freeloaders) was quite amusing. He said all the right things (at least it's what he must have thought in his mind) and his speech was the exact opposite of Vance's as far as diplomacy is concerned. Unnecessarily patronizing too, a fact that European leaders certainly appreciated coming from a 250 years old country... It was a perfect speech, really, the kind you give at a funeral. Because this is what it was as far as Europeans in the room were concerned. The funeral of the "unbreakable" relationship between the US and Europe as it was. This speech was full of nice sentiments that didn't match the reality of tariffs, aggressive speeches, broken contracts and treaties and Greenland. And as it is the case when you hear such a speech at a funeral, nobody bought it and nobody gave a crap.

But Rubio's speech showed us that at least a tiny part of the Trump administration is spooked by the international damage done to the US image and reputation among its allies and they are trying desperately to get a handle on the situation and save what can be saved, while still trying to appear as the tough guys for the MAGA crowd. Problem is, there's nothing to save, certainly not by this US administration. You can't insult a partner one day, threaten to invade its territory the day after and go "I didn't mean it that way" the day after that. And God knows that the insults toward Europe have been both numerous and cumulative for the past year. And they won't be forgotten or forgiven that easily. Greenland was the last nail in the coffin. We're also not amused by the attempts at interference in European countries democratic election process by the US administration to try and get far right politicians elected, like last year in Germany...

Trump wanted a strong but vassalized (oops, Firefox doesn't even know this word, such an antiquated concept ) Europe to pay him dues, a strong Europe he will have at the end of the day, but not the kind of Europe he wanted, and the price paid by the US to achieve that is going to be disproportionate.

One thing is sure, I wouldn't like to be the next US president. Because the task of just keeping the US afloat internationally will be near impossible and will require major structural and political changes internally, no one wants another Trump in the future and clearly the American system failed there by allowing him to be elected not once but twice. So changes are required just to ensure that other countries grant again at least some level of renewed trust to any US administration, if that is possible (a big if). I don't even know what kind of guy or gal would even want that job. I certainly wouldn't.

The problem is that it's possibly what it will require, someone who, like Washington, doesn't even want to be president, someone who, somehow, will be forced to accept the position and do the best they can with what they will have to work with, someone who, because they are not associated with any particular ideology, may find a way to earn trust again.

And I'd suggest to choose someone who knows how global economy works because Trump is definitely not this guy. At that point, I'm not even sure that he knows what "treasuries" are or how vital they are to the US. I'm even pretty sure he knows less about economy than me, and I'm not an economist, I don't know that much about economy to begin with. Some concepts are not difficult to grasp though, like: "don't mess with the partners that are financing your debt".

In all that, there was a bright spot at the Munich Security Conference for the renewal of transatlantic relationships. German Chancellor Mertz extended a hand, specifically to the American people. A short part of his speech was in English instead of German because he was addressing the American people, not the US administration (which is a lost cause so we won't even try anymore). The point he was making is that yes, Europe is changing, Europe is grabbing back its independence or as he put it himself, is waking up from a long sleep away from history (or to put it in the words of Hollywood "We're back in business baby!"), but that just means we are phasing out the US as an hegemon because that option is no longer viable for us. That doesn't mean we don't want to be friends with the US, just that the conditions have to change. And he was engaging the American people, as the true power of the US, to do all that is possible to keep our friendship alive, through NATO and other ways, because this is not only in Europe interest but also in the US interest to cooperate and to repair this floundering relationship. I found that part of his speech very interesting because it is very rare for the leader of a country to address the people of another country, not its leadership. It was like saying "Well friends, let's put the idiot in the White House away for a minute and let's discuss, just between you and us, what is the best for the people of the US and the people of Europe".

So there's hope for a new future in this transatlantic relationship, although the path to it might be full of pitfalls and pain, and the relationship will have to move on to a new stage, hopefully a more mature one. But there's hope that it will end up being better for everyone involved, the American people and the European people both. It was the Chancellor of Germany essentially telling the American people, you are the ones deciding for your country, not the orange guy in his little castle.

Sorry it was another very long post but with events of that importance, you cannot just skim the surface.