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If geopolitics had a thermometer, the mercury would have dropped by a couple of degrees over the last 48 hours. At the start of the week, European leaders were outraged to be facing increased tariffs\u2014again\u2014from their trading partner and ally, the U.S., if they did not comply with demands from the White House for the purchase of Greenland.<\/p>\n
A framework of a deal has now supposedly been agreed upon between the White House and NATO, which would step up U.S. defense systems in the Arctic. Details of the agreement are still thin, especially on the issue of how much control the U.S. military will get over the NATO territory that is part of the Kingdom of Denmark.<\/p>\n
In turn, Trump de-escalated his threats of new duties on a host of European nations, and European threats of retaliation cooled as a result.<\/p>\n
While the deal takes some of the panic out of negotiations, it doesn\u2019t address the steady drift between the U.S. and the partners it once regarded as allies.<\/p>\n
That\u2019s according to Macquarie\u2019s global strategists Thierry Wizman and Gareth Berry. In a note sent to clients shared with Fortune<\/em>, the duo wrote there is a \u201cmutual alienation\u201d between America and its European counterparts. \u201cIt\u2019s in that spirit that we can still talk about a fracturing, more dangerous, world, in which the U.S. is less vaunted, the USD loses its reserve currency status, and where the U.S. focuses instead on the Western Hemisphere as its sole and defendable redoubt,\u201d the pair explained.<\/p>\n Friction between the U.S. and Europe\u2014be it the E.U. or the U.K.\u2014has increasingly been chafing as the second Trump administration charts its course. Issues have included Europe\u2019s contributions to NATO and Trump\u2019s tariff regime. <\/p>\n \u201cEven in the Greenland deal supposedly reached yesterday, there are elements of mutual distrust,\u201d write Wizman and Berry. \u201cFor example, a deal to cede part of Greenland to the U.S. may have only been struck alongside the quid pro quo that if the U.S. would continue to (very reluctantly) support Europe\u2019s view that Ukraine should stay wholly \u201cin Europe\u201d \u2013 i.e., outside of Russia\u2019s control.\u201d<\/p>\n This European demand therefore potentially puts the U.S. at odds with Putin, hence the incentive for America to bolster its defences against Russia by acquiring Greenland. Meanwhile, Europe has maintained a friendly approach to American rival China, with President Macron saying its investment is \u201cwelcome.\u201d<\/p>\n \u201cThis perceived threat to the U.S., invited in by Europe\u2019s demands and actions, motivates the U.S.\u2019s antagonistic attitude (and military threats) toward Europe, especially in regard to the \u2018need\u2019 for Greenland, and the U.S.\u2019s desire for Europe to \u2018man up\u2019, civilizationally,\u201d the note said.<\/p>\n Interestingly, the suggestion that Europe may react to America\u2019s actions by distancing their investment from U.S. assets seems to have got under the collar of the Trump administration the most. Treasury Secretary Scott Bessent addressed (and dismissed) claims that European buyers of U.S. debt may exit their positions in the bond market but some evidence of that could be seen in the increase in yields this week. The selloff faded later, as relations normalized across both sides of the Atlantic.<\/p>\n This is the \u201cAchilles Heel\u201d of America, Deutsche Bank said this week: The country is running a sizeable annual budget deficit and thus has a growing national debt. It needs that debt funded by foreign countries. And that begs a question about America\u2019s long-term economic firepower.<\/p>\n Broadly, the Trump 2.0 administration\u2019s actions have contributed to the view that the U.S. is an increasingly erratic partner, Macquarie wrote in a Global Outlook memo back in December. A \u201cwatershed\u201d moment came with the Liberation Day tariffs, which sent investors hunting for assets outside the White House\u2019s sphere of influence and, as a result, away from the U.S. dollar.<\/p>\n The episode will cast a \u201clong shadow\u201d over trust in the USD as a result, the team wrote last year, and the weaponization of America\u2019s economic prowess \u201cinjected greater urgency into the search for alternative currencies as a store of value or with which to transact.\u201d<\/p>\n Trump\u2019s most recent U-turn will do nothing to undo fears that America isn\u2019t the financial safe haven it once was. As the Macquarie strategists wrote in their latest note, the current state of play is \u201cnot a good place to be if you want to preserve the USD\u2019s reserve-currency status. That status was built on the premise of U.S. leadership and protection, in return for a modicum of subservience (and financing) from the U.S.\u2019s allies and others that joined the U.S.-led rules-based order.\u201d<\/p>\n \u201cWithout that understanding, diversification away from the USD will ultimately take hold, even if it starts out by being a diversification into gold, instead.\u201d\u00a0<\/p>\n<\/div>\n #Greenland #deal #wont #solve #USEurope #alienation #Macquarie<\/p>\n","protected":false},"excerpt":{"rendered":" If geopolitics had a thermomet… <\/p>\n","protected":false},"author":1,"featured_media":15006,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[10136,110,486,3998,5542,1420,860,267,2104,10135,2307],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/15005"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15005"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/15005\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/15006"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Threat to the dollar<\/h2>\n