America's Allies Flee to EU Defense Initiative as Trump Tariffs Expose Unreliable Partner

Japan, Australia, South Korea, and New Zealand have formally applied to join the European Union's SAFE defence initiative, signaling a dramatic shift in global security partnerships as America's traditional allies seek alternatives to Washington's protection.

The applications, submitted on January 2nd, follow Canada's admission as the first non-European member of the Security Action for Europe programme six weeks earlier. The moves represent the most significant realignment of democratic security cooperation since NATO's founding.

The Great Decoupling

The SAFE initiative, a 150 billion euro defence-financing instrument launched under the EU's "Readiness 2030" agenda, was designed to fill capability gaps and support joint procurement across Europe. Its appeal to Asia-Pacific democracies reflects growing unease with American reliability.

According to the European Commission, while only EU member states can obtain SAFE loans directly, countries with Security and Defence Partnerships can participate in common procurement. Japan, South Korea, and Canada have all signed such partnerships.

The timing is not coincidental. Trump's tariff threats against European allies over Greenland have demonstrated that Washington views even its closest partners as potential targets. If America can threaten Denmark, a founding NATO member, what guarantee do Japan or Australia have?

Trade Numbers Tell the Story

The European Union now conducts more global trade than the United States, a shift that has accelerated over the past two decades. According to Visual Capitalist, EU total goods trade reached 5.43 trillion dollars in 2024, compared to America's 5.38 trillion dollars.

More telling is the export comparison. The EU exported 2.8 trillion dollars in 2024, some 34 percent more than the United States. When it comes to actually making things the world wants to buy, Europe leads.

The dollar's position as the world's reserve currency has also weakened. According to Wolf Street, the dollar's share of global currency reserves has fallen to 56.92 percent, down from 64.69 percent in 2017. The decline represents the lowest level since 1994.

The EU holds significant leverage in any trade dispute with Washington. European countries own 8 trillion dollars of US bonds and equities, almost twice as much as the rest of the world combined, according to Deutsche Bank. This gives Brussels considerable financial firepower should relations deteriorate further.

The Defense Buildup

European defence spending has surged in response to both Russian aggression and American unreliability. According to the European Council, defence investments grew 42 percent in 2024 compared to 2023, reaching a record 106 billion euros. Projections for 2025 approach 130 billion euros.

The EU's ReArm Europe plan aims to mobilize 800 billion euros in defence spending. Germany alone plans to spend 108 billion euros this year, equivalent to 2.5 percent of GDP and more than twice its 2021 budget.

Some commentators have called for going further still. The idea of a "Defence Alliance of European Territory" as an alternative to NATO has gained traction in online discussions, reflecting frustration with American reliability.

Replies to the proposal have been supportive. One commenter noted that the US "wants to occupy Greenland after occupying Venezuela," arguing that Europe must recognize NATO is becoming an American institution while a European alternative becomes necessary.

Skeptics Have a Point

Not everyone is convinced that institutional responses will suffice. One widely shared reply to discussions of European coordination asked bluntly how many troops the World Economic Forum commands.

The skepticism is fair. Europe's defence capabilities lag behind its economic weight. The continent meets only 50 percent of NATO capability targets, according to defence analysts. National budgets often duplicate efforts, limiting research and development potential.

But the skeptics miss a crucial point. Europe's strength lies not in matching American military power but in building something different: a rules-based coalition of democracies that can act independently when Washington cannot be trusted.

What This Means for America

The applications to SAFE represent more than bureaucratic paperwork. They signal that America's most important allies in both Europe and Asia are hedging their bets on Washington.

American arms sales to Canada, Japan, Australia, South Korea, and New Zealand have generated billions in revenue. If these countries increasingly source equipment through European-led procurement, that revenue disappears. Higher costs for American weapons follow as economies of scale shrink.

As one observer noted in reply to discussion of the SAFE applications: American weapons sales to these allies are "all about to be gone, along with all of their sales to Europe." The result will "dramatically increase the cost of American weapons for Americans to buy."

Europe's Moment

The contrast with Macron's declaration that China is welcome to invest in Europe is instructive. Europe is not closing itself off from the world. It is building alternatives to dependence on an unreliable partner.

Canada's pivot to China follows a similar logic. When the rules-based international order's supposed guarantor begins threatening allies with tariffs and territorial demands, partners seek insurance elsewhere.

The EU's response has been measured but firm. Hungary may block joint statements, but the practical response from most European nations has been coordinated deployment of troops to Greenland and serious discussion of activating the Anti-Coercion Instrument against American goods.

EU foreign policy chief Kaja Kallas put it directly: Trump's tariffs play into the hands of China and Russia. They benefit from divisions among allies. The answer is not capitulation but closer cooperation among those who share democratic values.

The New Reality

For decades, America's allies operated on a simple assumption: Washington would protect them. That assumption no longer holds. The question now is what comes next.

Japan, Australia, South Korea, and New Zealand have provided one answer by seeking entry to European defence cooperation. Canada has provided another by pursuing strategic partnership with Beijing. Britain is reconsidering its post-Brexit isolation.

Europe finds itself in an unexpected position: the centre of a new democratic coalition being built not in opposition to America but in parallel to it. The EU's economic weight, institutional depth, and commitment to rules-based order make it an attractive partner for democracies looking for alternatives.

The SAFE initiative was designed to strengthen European defence. It may end up doing something more significant: providing the foundation for a new global alignment of democracies that does not depend on Washington's goodwill.

That would be lonely times ahead for America indeed.