Is Trump’s America First strategy starting to backfire as allies tire?
Members of President Donald Trump’s cabinet, including Energy Secretary Chris Wright, Commerce Secretary Howard Lutnick, Chief of Staff Susie Wiles, Treasury Secretary Scott Bessent, and Secretary of State Marco Rubio, listen to Trump speak at the World Economic Forum (WEF) at the Davos Convention Center on January 21, 2026 in Davos, Switzerland.
Chip Somodevilla | Getty Images
As allies reassess their ties with the world’s largest economy and consider going it alone, the United States looks increasingly isolated when it comes to global geopolitical and trade relations.
The new year has seen a reset of relations, closer trade ties and trade partnerships, with a number of countries and power blocs pushing aside a more hostile and volatile United States. These include China’s “preliminary agreement” with Canada and its rapprochement with the United Kingdom, as well as the European Union’s agreements with India and South American countries.
These agreements and negotiations come a year after US President Donald Trump’s “America First” trade and foreign policy implemented during his second term; In this policy, the White House strikes friends and foes alike with punitive trade tariffs and even regional threats while asserting its economic and geopolitical dominance.
But this strategy could backfire, especially as America’s friends and partners look to diversify their trade policies to protect themselves from Trump’s unpredictability.
“Given what is happening in the United States and its foreign policy expressed in the recently published report National Security Strategy … ‘middle powers’ need to find their own institutions and find different approaches,” Damian Ma, director of Carnegie China, an East Asia-based research center, told CNBC on Thursday.
“Countries will align based on specific, specific à la carte interests rather than an alignment based on overarching values,” he said, noting that this was not a return to the divided Cold War mentality of opposing power blocs but rather a “recalibration” of national interests.
“It’s anyone’s guess where this recalibration and new balance will end, but you’re seeing countries finally starting to make moves. It won’t just be the UK and Canada,” he said, predicting “an influx of countries recalibrating their approaches” against superpowers like China and the US.
Diplomacy, except Trump
This recalibration has certainly accelerated recently, with a series of diplomacy and trade agreements in place since the new year, none of which involve the United States or President Trump.
China was particularly busy; Canadian Prime Minister Mark Carney, Irish Prime Minister Michael Martin, Finnish Prime Minister Petteri Orpo and Starmer visited Beijing this month.
Canadian Prime Minister Mark Carney shakes hands with Chinese President Xi Jinping at the Great Hall of the People in Beijing, China, on Friday, January 16, 2026.
Sean Kilpatrick | via Reuters
The EU has also been busy making progress on its trade deal with Mercosur and signing the long-awaited free trade agreement with India last week.
These meetings followed Trump’s tirade against his allies during a speech at the World Economic Forum in Davos, Switzerland, in which he insulted and criticized various leaders, including French President Emmanuel Macron and Carney.
Jimena Blanco, principal analyst at risk intelligence firm Verisk Maplecroft, told CNBC that there has been a measurable deterioration in U.S. communication with its allies.
“Our data measuring verbal tensions between countries shows that U.S. relations with some of its key allies have deteriorated over the past year,” he told CNBC on Thursday.
“The sharpest increases were recorded in Canada, Denmark, Belgium, Japan, Ireland, New Zealand and France, reflecting the impact of tense public talks between U.S. officials and their counterparts in allied countries.”
However, Blanco noted that US allies tend to respond to Washington’s policy changes by diversifying their economic risks rather than reversing their integration in the global trading system.
“The EU, Canada, Japan, Australia and the UK cannot afford to cut ties with the US, instead they are expanding trade with each other as well as with major emerging markets,” Blanco added, with emerging markets being the “big winners” of this diversification.
rocky patch
Analysts, who consider this period of difficult relations with the United States as a difficult period rather than a basis for divorce, say that the United States’ allies have little choice but to try to keep the United States on their side while exploring other avenues of trade and cooperation.
“Europe is too dependent on the United States, not only for its security but also technologically and economically, to opt for a divorced life today,” Ivan Krastev, head of the Center for Liberal Strategies in Sofia, Bulgaria, said in a Goldman Sachs report earlier this week. he said.
“For Europe, while there is much talk about finding new allies, aligning with others won’t be a quick or easy process,” he noted, adding: “Instead, Europe will be focused on showing the US that Europe matters.”
Joseph Parkes, senior analyst at Verisk Maplecroft, agreed that the United States is too big to be isolated: “It’s very important in terms of technology, trade, currency and security,” he told CNBC on Thursday.
However, he said key allies will aim to rebalance their global relations in strategic areas in the long term.
“The nature of globalization will change. Fragmentation of trade will create new and distinct groupings of countries seeking to increase economic resilience,” he told CNBC on Thursday, adding that “geopolitical agility” has become increasingly important for businesses to navigate a more uncertain environment.
“Recent volatility has accelerated the shift from ‘just in time’ to ‘just in case’ to strengthen supply chains,” he noted, with companies turning to ‘nearshoring’ and ‘friendliness’ to source supplies from trusted allies.
Meanwhile, Parkes said governments would seek to “expand trade agreements to build strategic flexibility and reduce market and supply chain dependence on any one country.”
