The Shortcomings of US Transactionalism

As the United States attempts to disrupt and unsettle the existing rules and, maybe, force a transition to a new international order, its ability to manage the process seems to be slipping beyond its grasp. America is back at war with Iran and the path to deescalation appears to be out of reach. China is presenting itself as the leader of international cooperation on artificial intelligence (AI) while the US Congress is proposing a series of export control policies on semiconductor chips. And Europe continues efforts to reduce its long-term dependence on America without accelerating an American exit. 

America’s historic ambivalence toward Europe's search for strategic autonomy was on full display this week. Just days after NATO’s Ankara summit ended, US Under Secretary of Defense for Policy Elbridge Colby took aim at the middle-power project, calling it “a distraction” that could waste “time, money, and political capital.” Middle powers, he argued, lack “a coherent basis for alignment,” while access to America’s defense industrial base is “a privilege, not a right.” Colby did not name Europe directly, but he did refer to a Politico piece quoting Germany’s air force chief who stated Berlin was buying US F-35s for a lack of European alternatives. 

Why is Colby speaking about this now? Nearly six months have passed since Canadian Prime Minister Mark Carney declared a “rupture” in the international order at the World Economic Forum in Davos and put out a clarion call for middle powers to act together “because if we’re not at the table, we’re on the menu.” Since then, European leaders have distanced themselves from the US war with Iran. Spain denied America access to its joint installations and closed its airspace to aircraft involved in US strikes, Italy refused refueling rights, and even the United Kingdom initially blocked use of its bases before reversing within a day under pressure.

Below the radar, Europe has also begun to make a series of choices to build greater independence from US systems. Most obviously, several European states have taken significant steps to increase their defense spending. At a roundtable I participated in at London Business School this week, a leading European defense analyst noted several other measures gradually altering the landscape: Britain is developing a new class of strike missiles that contain no American components and rely on no American targeting data, and Denmark chose the French Italian SAMP/T for the long-range tier of its new air defenses over the American Patriot. Skeptics may say these are small measures in the overall context of transatlantic security. But it is a direction of travel that stands a chance of gaining momentum. 

Read differently, though, Colby’s intervention suggests America understands there are benefits from having allies, but that those benefits are not guaranteed. The Ankara summit was a success, even if judged by a low bar. Canada and European allies committed to €70 billion in military support for Ukraine in 2026 and at least equivalent support in 2027. 

In Iran, though, the United States has received limited support from its European allies. And this week, Gulf states resisted pressure to pay Washington for its efforts to protect the Strait of Hormuz, promising trade and investment deals instead. 

Colby may also be gradually realizing that US transactionalism is creating a gap that others will fill.

As the United States conducted a sixth consecutive night of strikes against Iran and reinstated its blockade of vessels entering or leaving Iranian ports and Iran fired missiles and drones toward countries hosting American forces, Chinese President Xi Jinping delivered the keynote address at the 2026 World AI Conference and High-Level Meeting on Global AI Governance in Shanghai. His remarks framed China as the champion of an open and cooperative AI order, promoting open-source models and technology-sharing while pledging training and technical assistance to developing countries. Last month, I attended the World Economic Forum in Dalian, China, where Chinese Premier Li Qiang delivered a speech that framed China's efforts to cooperate globally in a similar light. Skepticism is warranted, but the contrast with America's current bombastic rhetoric is notable and may appeal to those who seek rules and stability. 

Meanwhile, the United States is scrambling with little seeming coherence in its global technology strategy. In the same week Congress prepared legislation to reduce China’s access to advanced semiconductor chips, the Commerce Department also granted the United Arab Emirates license-free access to advanced chips and servers, explicitly citing the UAE’s support for Operation Epic Fury. Leading chip expert Chris McGuire warned that removing case-by-case licenses also eliminated conditions that had prevented users in China from remotely accessing American chips housed in Emirati data centers. 

Put in strategic context, America’s treatment of its European allies and pressure tactics on Gulf partners reveal the shortcomings of America’s transactional approach. 

So, what happens when trust unravels, short-term interests are substituted for the long-term game, and we are left with transactionalism as a basis for cooperation?  We may soon discover the answer. The Pew Research Center found only 27 percent in France, 39 percent in Germany, and 49 percent in Britain called America a reliable partner, each down double digits since 2022. American power remains formidable, but allies are increasingly unsure what purpose it serves.