How Trump’s tariffs are pushing America’s allies toward each other — and away from the US

(L/R) US President Donald Trump speaks alongside Secretary of Defense Pete Hegseth and Secretary of Commerce Howard Lutnick during a cabinet meeting in the Cabinet Room of the White House in Washington, DC, on July 8, 2025. (Photo by ANDREW CABALLERO-REYNOLDS / AFP)

A global trade realignment is underway — and the United States may be sidelining itself in the process. President Trump’s surprise decision this weekend to impose sweeping 30% tariffs on the European Union has not only sparked anger in Brussels, but also accelerated efforts by longtime US allies to deepen trade ties with each other instead, the New York Times reported.

For the European Union, the tariffs marked a dramatic rupture. Brussels had been locked in months of negotiations with Washington, hoping to stave off tariffs by agreeing to a 10% baseline and carve-outs for key sectors. But with a single social media post, Trump announced a 30% rate on European goods, blowing up what E.U. leaders thought was a nearly finalized deal.

Ursula von der Leyen, president of the European Commission, responded with a dual-track strategy: delay retaliation until early August to leave the door open for talks, but prepare aggressive countermeasures in case diplomacy fails. “At the same time, we will continue to prepare further countermeasures,” she said on Sunday, noting that $25 billion in suspended retaliatory tariffs could be reactivated.

A global pivot away from Washington

What’s becoming clear is that Europe — and many of America’s other major trading partners — no longer sees the US as a dependable player in global trade. “In hard times, some turn inward,” von der Leyen said, in what was widely interpreted as a rebuke of Trump’s protectionist turn. “You are always welcome here, and you can count on Europe,” she added, standing beside Indonesia’s president, Prabowo Subianto, in Brussels.

The E.U. is moving quickly to fill the void left by the US, striking new deals and deepening existing ones. In recent months, Europe has edged closer to Canada, rekindled cooperation with post-Brexit Britain, and accelerated talks with India, South Africa, and Southeast Asian countries. Some E.U. leaders are even floating ideas for new trade pacts that deliberately exclude both the US and China, aiming to forge a fairer, rules-based order in response to what they see as economic coercion from both superpowers.

This week, von der Leyen proposed closer cooperation with a trade group of 11 countries including Japan, Vietnam, and Australia — but not the United States or China. The message was clear: the EU sees its future in broader coalitions not centred around Washington.

Trump’s strategy of uncertainty

Trump’s tariff blitz has not been limited to Europe. On Saturday, he also announced similar or steeper tariffs for Mexico (30%), Canada (35%), Brazil (50%), and others including Thailand and Bangladesh. The announcement came after weeks of mixed signals, frustrating US trade partners and upending fragile negotiations. “It’s a complete move of the goal posts,” said Mujtaba Rahman of the Eurasia Group.

Rather than acting as a stabilizing force in trade, Trump appears to be leveraging chaos. Jacob Funk Kirkegaard, a senior fellow at the Brussels-based Bruegel think tank, said the president is

“instrumentalizing uncertainty” as a tactic — one that may backfire by pushing other economies into closer coordination against the US.

That scenario is no longer far-fetched. In Brussels and other capitals, policymakers are now openly discussing whether to coordinate retaliatory tariffs, creating a united front. “That’s the rational thing,” Kirkegaard said. “I would start to look for coordination.”

Rebuilding trust, without America

While no country can afford to fully sever economic ties with the US, many are coming to the conclusion that they must diversify away from it. American unpredictability under Trump — particularly his willingness to publicly abandon diplomatic progress — has deeply shaken trust. “Trump is trying to divide and scare Europe,” said Brando Benifei, head of the European Parliament delegation for US relations.

Yet in a twist, Trump’s actions may be having the opposite effect: binding the EU and other traditional allies more closely together. The latest tariffs have sparked an unusual alignment between the UK and the EU, five years after Brexit drove them apart. Canada, too, is stepping up its outreach to Asia. Mexico and Brazil are both building stronger regional networks.

Some world leaders still voice hope that the US will remain a key player. President Prabowo of Indonesia, while praising Europe’s leadership, noted that the United States would likely “always be a world leader.” But the foundation of that leadership — trust, reliability, and shared vision — appears to be eroding fast.

The longer this trade realignment continues, the harder it will be to reverse. Once tariffs go into effect and new partnerships are forged, they become sticky. And even if the US shifts course after November’s election, the damage may be done. The global trade map is already being redrawn — and this time, the United States may find itself on the margins.