GTBT - Trump Shakes The Pillars of the American Empire

: Hubert Walas; Created: 28 March 2025

The end of the Atlantic illusion: the real price of US hegemony.

Three years. 1,100 days. Since Russian tanks rolled into Ukraine, so much has happened.

Full-scale wars were supposed to be a thing of the past—yet Russia launched a full-scale invasion. Ukraine was expected to collapse, yet for three years it has fought relentlessly, meanwhile reclaiming a significant portion of its territory from the invaders.

There is also an American administration that has transitioned from promising support "for as long as it takes" through a phase of significantly diminished assistance, to today rhetorically—and increasingly in practice—marching in lockstep with Vladimir Putin's narrative.

Donald Trump, on one hand, explicitly states he wants to "get American taxpayers' money back" and even expected a five-fold return on investment in Ukraine. On the other hand, following positive news regarding a resource deal, he indicates he might allow continued military aid to Ukraine.

Let's examine what has transpired in recent days and pose the question: Is it in Trump's and America's interest to sever Euro-Atlantic ties, pursue a policy of coercion, and abandon the entire capital of credibility that successive U.S. administrations have built over decades? Is Europe free-riding on America?

Merz wins

Recent weeks after Donald Trump's inauguration have been an information rollercoaster. Last time we started by organizing key events—let's do the same now.

Over the weekend, parliamentary elections were held in Germany, returning the Christian Democrats (CDU/CSU) to power. However, they won by "only" 4 million votes over Alternative für Deutschland—a Eurosceptic and pro-Russian party (advocating for sanctions removal). Adding votes from another far-leaning party—Sahra Wagenknecht's BSW, which narrowly missed entering the Bundestag—over 25% of German votes went to parties that pose a threat to the intra-European order.

For now, though, the Christian Democrats will govern, with Friedrich Merz as potential chancellor, most likely in coalition with Olaf Scholz's SPD. The entire "traffic light coalition" (SPD, FDP, and Greens) recorded worse results than in previous elections, with AfD and BSW collectively capturing 15% of votes compared to the last election.

Future Chancellor Friedrich Merz quickly struck alarmist tones, announcing that Europe should seek independence from the US as soon as possible, and that NATO might "soon be dead." Such a view from the typically measured Christian Democrats was undoubtedly influenced by American administration interference in the German elections. Elon Musk repeatedly encouraged voting for AfD on platform X. J.D. Vance did the same a few days earlier, attacking German liberals in Munich.

Merz says much about becoming independent from Americans but simultaneously offers few specifics about changing Germany's approach to the war in Ukraine. Remember that the main European catalyst for the war was Angela Merkel—Merz's predecessor at the helm of the CDU-CSU duo. Additionally, Scholz's SPD will remain an integral part of the government. On the other hand, it's worth noting that Merz comes from the more conservative wing of the party and often criticized the former chancellor for policies including her open-door approach.

While Germany is occupied with internal organization, Emmanuel Macron is attempting to take over European leadership in Europe's contact with the US, visiting Donald Trump.

In conversation with the US president, Macron skillfully maneuvered, trying not to step on Trump's toes while simultaneously asserting the French or European position when the situation required it.

On one hand, Macron acknowledged that although he hasn't spoken with Putin since the Bucha massacre, the context today is different and he's ready for it. On the other hand, when Trump insinuated that Europeans merely lend money to Ukrainians,

Macron quickly corrected the American, stating that Europe pays "60% of the total commitment" and supports the idea that Ukraine should be repaid first (implicitly by Russia). He simultaneously communicated that any deal cannot mean "Ukraine's surrender" and must be supported by security guarantees. Interestingly, he backed Trump by saying peace could be expected even within the coming weeks.

Despite internal problems, France today holds the strongest cards on the Old Continent, strengthening Emmanuel Macron's foreign policy. Looking across the board, France has Europe's strongest military and nuclear weapons. It has a reliable source of clean energy—nuclear power. Its economy is much less dependent on the suffering automotive sector (unlike Germany's). Additionally, it's furthest advanced in artificial intelligence programs.

Of course, the fact that the French have well-established foundations doesn't mean that any leadership in Europe will be simple, but with German problems, the Élysée Palace senses its opportunity. For a good start, the French have offered that in case of American withdrawal, Paris could send combat aircraft with nuclear weapons to German territory.

However, it's doubtful that Macron's agenda would influence Donald Trump's policy—which in subsequent days continued to align with the Kremlin's narrative. Another episode of this thawed friendship took place at the UN forum, where Washington allied with Moscow on a UN resolution regarding the war in Ukraine. First, the United States opposed a European-prepared resolution condemning Moscow's actions and supporting Ukraine's territorial integrity—voting the same way as Russia, North Korea, and Belarus. Then, the United States prepared and passed a resolution in the UN Security Council calling for an end to the conflict but containing no criticism of Russia.

What’s more, resource agreement negotiations between the USA and Ukraine continued, which has officially been named the "Reconstruction Investment Fund." According to the initial version of the agreement, the fund would aim to utilize maximum profit from all resources owned by Ukraine until reaching a value of $500 billion, with its goal being to restore Ukraine's GDP to 2021 levels, or to $200 billion compared to $180 billion today. Additionally, the Agreement will require Ukraine to contribute an amount equal to twice the financial assistance provided by the United States after the date of this Agreement. Americans, meanwhile, were to reciprocate with "the intention of a long-term commitment to Ukrainian stability and economic prosperity.

The Ukrainians were trying to play this issue coolly, but Zelensky clearly signaled he was aware of the attempted coercion. "I will not sign something that 10 generations of Ukrainians will pay for," he finally said. He added that he does not recognize a debt of $500 billion. American support so far, as he communicated, has amounted to $100 billion, adding that these were not loans but grants approved by the Biden administration and Congress.

And so the talks continued. The Financial Times eventually reported that Ukraine had agreed to a revised deal. How was it changed?

The final version of the agreement, dated February 24th, provides for the establishment of a fund to which Ukraine would contribute 50% of revenues from "future monetization" of state mineral resources, including oil and gas, and related logistics. The fund would invest in projects in Ukraine.

Furthermore, the agreement does not include mineral resources that already feed into the Ukrainian state budget, meaning it will not affect the current operations of Naftogaz or Ukrnafta—Ukraine's largest gas and oil producers. However, the agreement again omits any mention of security guarantees from the US, which Kyiv had initially insisted upon. It also leaves key issues to be determined in future negotiations, such as the size of the American stake in the fund and details regarding "joint ownership" agreements, as well as which jurisdiction it will fall under.

The agreement may be signed as early as Friday, when Volodymyr Zelensky visits the US. Olha Stefanishyna, Ukraine's Deputy Prime Minister and Minister of Justice, who led the negotiations, stated that the resource agreement is just "part of a bigger picture."

The agreement will also need to be ratified by the Ukrainian parliament, where the opposition has already signaled that they will scrutinize it very carefully.

The European Union also reportedly responded to the American proposal by reminding Kyiv that it has a critical minerals agreement with the EU. "Twenty-one of the 30 critical materials Europe needs can be provided by Ukraine in a win-win partnership" said European Commissioner for Industrial Strategy Stephane Sejourne.

Finally, Wednesday evening, the Ukrainian side confirmed that a significant framework agreement will be signed on Friday by Zelensky and Trump. Is this a breakthrough? Certainly, reaching an agreement between Kyiv and Washington is positive, which may influence Trump's attitude and his PR success, but the agreement itself is far from implementation. In its current format, it more closely resembles a preliminary memorandum on how Ukraine and the US might in the future invest in Ukraine's resource sector and profit from it together. Whether this develops into real cooperation will depend on further arrangements between Trump and Zelensky. Importantly, in subsequent communications, Zelensky stated that the agreement includes some provisions regarding security guarantees.

Positive reports about resource negotiations have evidently influenced Donald Trump's mood, who shifted from accusations and attacks toward Ukrainians to praise and promises. Let's listen:

What's more, on Thursday, Trump seemed to have forgotten about calling Zelensky a dictator and added that he greatly respects him, and his message even included the possibility of helping Ukraine take back the raked territory.

And so, Trump is allowing for the possibility of Ukraine continuing the war, as well as the option of further military support—though I wouldn't put too much stock in the specific amounts, as many signs indicate Trump uses these figures randomly. In other words, we're seeing another move in a game of 5D chess whose outcome we cannot predict today.

Yet let's consider a dark scenario for the Western world—one where Ukraine is abandoned to Russia's mercy, with Americans further severing Atlantic ties with Europe and continuing to dismantle the current international order. We must remember that such theses are appearing increasingly often among mainstream commentators. One could mention Martin Wolf's recent article for FT:"The US is now the enemy of the West."

We operate in a mosaic of connections, dependencies, and interests that is difficult to comprehensively understand—in fact, no one has the complete picture. Each player—Ukraine, Russia, the US, China, and Europe—has its own goals and leverage points in this game. Even Ukraine has significant leverage. Kyiv stands firm in the war and seems to communicate that it will survive even without the Americans (but with Europe)—which means that Washington doesn't have complete control over events, contrary to what it communicates. Even in tandem with Moscow, it cannot push through an agreement if Ukrainians and European states disagree and show determination in achieving their goals.

A week ago, we mentioned that Europe with Ukraine could take leadership in the war without looking to Americans. That this is theoretically feasible doesn't mean it will happen in practice—due to the recurring indolence of EU countries on broader security policy issues. However, pressure works well on community countries, as it was also pressure three years ago that pushed Western countries toward the costly goal of cutting ties with Russia and helping Ukraine. Today, similar mobilization can be observed—the question is what tangible effects this policy will have.

Europeans, although reading Donald Trump's successive statements with consternation, are reaching heights of courteous goodwill and diplomacy. Behind the scenes, however, major shifts are taking place—Europe is preparing to cut the umbilical cord from the Americans—for now militarily, but possibly in other areas as Trump's aggressive agenda continues. Economy, common institutions, or even values—the Atlantic world faces a big question mark.

Donald Trump and many Americans claim that Europe has sustained itself on American taxpayer money, feeding off security provided by Americans. Even Europeans don't challenge this thesis— but they should.

While Europe is indeed dependent on the US in security matters, it certainly hasn't been getting it for free. On the contrary—America's hegemonic position resulted from making the entire world (especially allies) dependent on it, and as a result of this dependency, the American military sector, big tech, stock market, and ultimately the American dollar enjoyed an incredibly privileged position.

American omnipotence translated into credibility. Yes, Europeans or Asians spent less on defense than they would have without American protection, yet they still spent billions of dollars, much of which went to the bank accounts of companies like Lockheed, Raytheon, or Northrop. This military and industrial power, based on values that unite the Western world—freedom of speech and of the individual, prohibition of forceful border revision, or human rights—was transformed into American credibility. It meant that the entire West, though not only, seeking the best investment instruments, placed the bulk of their financial surpluses in the American market—which represented the most powerful and credible society in the world.

Money virtually flooded the American stock market, throughout modern history leading the S&P 500 index to continuous, uninterrupted growth that far exceeds the potential offered solely by 350 million Americans. This oversupply of capital found its outlet in the booming venture capital sector, which forms the foundation of American innovation and advantages in big tech and high technologies, such as AI and semiconductors. Finally, we have the powerful dollar, which is based on these same fundamentals, giving Americans the ability to incur debt whose cost is distributed across the entire world.

Therefore, Washington's "globalist" and "unipolar" policy was not a charitable mission for the benefit of the entire world, which cannot manage itself without Uncle Sam. It was a deliberate action aimed at taking control of all the world's power connectors and subsequently moderating this system so that ultimately most profits would flow to America. The world pays tribute to America, only no one speaks about it directly. A tribute orders of magnitude greater than what Trump demanded from Ukraine.

An electrician working in Ukraine earns $500, in Poland $1,500, in Germany $3,000, and in the United States $7,000. Each does the same job and dedicates the same number of hours to work. All have comparable competencies. Where does the wage difference come from? Well, it stems from various types of advantages that his native market has over the world market, and it's a collection of thousands of different elements. Of course, prices are also higher, but purchasing power and agency still remain on the side of the strongest.

Therefore, when Donald Trump sides with Russia in a war that breaks all the canons of the free world—he puts at stake all those advantages built by his predecessors. It begins with the devaluation of American defense industry companies and the appreciation of European counterparts. But if this trend continues, it won't end there. Investments in the unstable and less credible American market will be reduced by foreign investors. Dollar circulation may become increasingly undermined not only by BRICS or the Global South, but also by Europeans and other hitherto allies (especially when each of them is blackmailed with tariffs).

The European Union was created to “screw” the United States, Trump said recently, while announcing 25% tariffs on the EU—hitting primarily the auto market.

A weakened stock market will contribute to the devaluation of big tech, which, accustomed to an ocean of cash, will suddenly have to cope in much more modest conditions. Let's remember that American big tech has completely penetrated Europe, so if American alienation progresses, Europe will have growing motivation (including social) to replace American big tech with its own. A clone of Facebook, X, Instagram, or even YouTube for Europe would be trivially simple. This could also be followed by a return to hardware manufacturing.

Add to this the national ethos. America relies on immigrants. Most of them came to the States for better earnings, but also because America as a country is based on proper values. When these values are undermined, the desire of the most outstanding individuals to emigrate to America may also be shaken, as these are usually the most conscious people.

A very similar argument was made in a recent post on X by Balaji Srinivasan - one of the most recognisable thinkers in Silicon Valley today. Let's listen to this longer excerpt:

“Unlike past empires, American Empire is a hidden empire — as Daniel Immerwahr points out. Unlike the British Empire, it's not referred to in explicitly imperial terms, even if countries are expected to obey DC and pay tribute by buying Treasuries. [...] Anyway, this conversation is tricky because if you say "empire" then people instantly assume you're saying "empire is bad." But it's not always bad. Sometimes it's almost self-defense. Because power abhors a vacuum — and if you do decide not to play for world domination, you may well be dominated by the one who does. And that's the logic of empire.

This was understood generations ago. But today, neither left nor right fully appreciates what it took to build American empire. They just inherited it. They don't understand it. Among other things, the far left doesn't realize that it required capitalism and trade. The nationalist right doesn't realize that it required democracy and allies.

Combining these was the only way to build the multibillion-person global trade union that underpins the US dollar. You couldn't do that with 77M Trump voters or 75M Democrats alone. You need trade partners, you need allies.

Otherwise, when you print $6T (as the US did from 2020-2022) it's spread not across 6B+ people worldwide but just ~330M Americans. Because inflation is taxation, that's a 95% drop in the effective tax base. You go from printing $1000/head to $20000/head, with all the obvious consequences.”

In other words, Donald Trump's game carries primarily great danger for America's status and Americans' prosperity, which was born from victory in World War II and the Bretton Woods agreements. Of course, this doesn't mean that "America will fall"—far from it, America will manage even when it becomes completely autarkic and closes itself to the world (it has everything needed for independent functioning). However, it will then be poorer and less influential, which is not in Washington's interest.

This is precisely why the narrative about "Europe free-riding" is false and doesn't encompass second, third, or fourth-order consequences. The hegemonic position of the United States has brought enormous privileges to many key elements of their statehood.

The disorientation and disarmament of Europe was beneficial for Russia, but from a grand strategy perspective also for America—as it could penetrate Europe technologically and make it dependent in matters of security, and thus strategy. After several decades of such interdependence, both sides came to the conclusion that such an arrangement suited them. However, it was worse and more dangerous not for Americans, but for Europeans. That's why today's mobilization primarily serves Europe; paradoxically, one can thank Donald Trump for it.

However, fraternizing with Russia and applying economic coercion equivalent to war reparations on the victim of war represents an entirely different scale of action. And their effect may be the opposite of what was intended.

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