Finland's President Alexander Stubb, U.S. President Donald Trump, Italy's Prime Minister Giorgia Meloni and Britain's Prime Minister Keir Starmer attend a NATO leaders' summit in Ankara, Turkey, July 8, 2026.
On Wednesday, Americans woke up to a flurry of news regarding President Donald Trump’s hostile meeting with NATO leaders in Turkey, in which it has already been made clear that he intends to further distance the U.S. from its longtime allies. This prompted Nobel Prize-winning economist Paul Krugman to warn that a visibly “sundowning” Trump has pushed the U.S. into “precipitous decline.”
As Krugman notes, a recent report by the Wall Street Journal described how Trump’s threats to invade Greenland earlier this year drove European leaders to meet in what was described as a “therapy night” as they vented about the situation. “Yesterday,” writes Krugman, “soon after he arrived in Ankara for the NATO Summit, Trump reiterated his demand that Denmark hand him control of Greenland. But reactions were subdued. As far as I can tell, our erstwhile allies are now treating Trump as the senile uncle who says crazy, outrageous things, but shouldn’t be taken seriously.”
The change, he says, is that Europe has “given up hopes” that the U.S. will return to being the ally they once knew, and they’re preparing accordingly. Here he quotes the Journal at length:
“American allies have begun pushing the gas pedal on an unprecedented experiment in de-Americanization. Authorities from France to the Netherlands are quietly removing American tech from their systems, adopting European open-source software and urging civil servants to no longer use Microsoft Teams or Office. Belatedly, they are spending hundreds of billions of dollars to try to boost Europe’s own private space firms, AI companies, and data centers, to avoid leaning on U.S. juggernauts.
“Europeans are running studies on where they would store their data or process their payments should friction with the U.S. escalate, and how well their American-made weaponry would operate without Washington’s authorization. Nations whose empires once spanned the globe are now stuck trying to extricate themselves from their humbling dependency on American technology and military power, without provoking the U.S.”
According to Krugman, this turn from the U.S. has come because they realized that the nation that twice elected Trump “simply can’t be trusted,” while simultaneously recognizing “plummeting perceptions of his power.” In other words, “the world no longer takes him seriously.”
While the country is still technically a superpower, asserts Krugman, “Thanks to Trump, the U.S. has seen its global influence plunge.” He cites three main factors driving this “precipitous decline.”
“First, there is the debacle in Iran,” writes Krugman. “Not only did Trump’s war of choice fail in all its objectives, it revealed that U.S. military power is far more limited than almost anyone realized.” What’s more, “in addition to showing the limits of U.S. military power, the war also showed the limits of U.S. financial power: It is increasingly easy for nations to bypass U.S. banks and the dollar using cryptocurrency — and Chinese yuan.”
Second, though Trump and his allies have made it clear that they hope Russia will win over Ukraine, the fact that his influence has failed to deliver a win to Putin further demonstrates slipping American power. As Krugman explains, “After Trump cut U.S. aid to Ukraine by 99 percent, Ukraine not only survived but began gaining the upper hand. Europe has stepped up financially, more or less replacing the lost American dollars. And Ukrainian military innovation has largely made up for the loss of American weapons. The result has been to make the U.S. increasingly irrelevant.”
“Finally,” writes Krugman, “Trump’s global power play rested on economics even more than on military force, above all on his belief that other nations would cower in fear at the prospect of facing U.S. tariffs. But Trump’s attempt to weaponize international trade has been a bust.” As a result, rather than dealing with the U.S., strained allies are working around it. Krugman raises the example of Canada’s decision to build a new pipeline that will bring oil directly to Asia rather than the U.S.: “a highly visible symbol of a general world move toward bypassing America now that we have become an unstable, unreliable economic partner.”
As Krugman concludes, “The combined effect of these humiliations for Trump and his minions has been a drastic reordering of America’s place in the world. For most of last year foreign leaders kept trying, desperately, to appease Trump. These days they’re mostly just humoring him, building a world in which his sundowning won’t matter… Nobody expects anything but chaotic bluster from Trump, and what he does matters less and less.”
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