President Donald Trump has stepped into tonight’s World Cup match between the United States and Belgium, apparently because the Republic, having just celebrated its 250th anniversary, has reached the point where the commander in chief must protect the striker corps.
One gets used to irony while practicing macroeconomics. Today’s incidence is too good to leave on the bench.
The background:
The U.S. men’s soccer team striker and goal-scoring leader, Folarin Balogun, was born in Brooklyn to Yoruba-Nigerian parents. He was raised in London and trained at one of the “big five” English Premier League clubs, Arsenal. Falugon, like most of the team, plays professionally in Europe. In his case, the club team that represents Monaco.
Here’s the drama: Falugon was facing a one-match suspension to be served during tonight’s match against Belgium after a questionable red card in itsRound of 32 win against Bosnia and Herzegovina.
Yesterday, FIFA, the international federation that runs the World Cup, reversed the ban after Trump personally appealed to FIFA President Gianni Infantino, allowing Balogun to play tonight in a win-or-go-home context.
Trump praised the reversal as a “brilliant decision,” while UEFA said FIFA had “crossed a red line” by allowing political influence to enter a disciplinary matter.
Irony in two parts: Balogun is an American citizen because he was born in New York, after airline staff reportedly refused to let his heavily pregnant mother board a return flight to London. His path to the U.S. national team was made possible by “birthright citizenship,” the same constitutional principle the Supreme Court has just upheld after rejecting Trump’s attempt to limit it. The striker has never lived in the United States.
The second irony is geographic. The United States plays Belgium, and Belgium hosts the headquarters of both NATO and the European Union. Brussels is where European officials have spent the past year asking whether America remains the protector of Europe, a difficult question for them to answer, while the American president is lobbying FIFA to get a Brooklyn-born striker cleared for a knockout match against the Belgians.
Tomorrow, NATO leaders gather in Ankara, Turkiye, for the July 7 to July 8 summit chaired by NATO Secretary General Mark Rutte.
The alliance gathers, for one, to debate a draft commitment that Russia remains a long-term threat and that collective defense still applies, but the words will land inside a relationship that has already changed shape.
Trump’s tariffs against Europe, his threats involving Greenland, the war in Ukraine, the Iran strikes, and the campaign to push NATO members toward far higher defense spending have left Europe trying to preserve the alliance while preparing for an America it no longer fully trusts.
🧊 Therapy Night in the Space Egg
Our December forecast was that Europe would come under increasing strain from war, debt, energy costs and bureaucratic inertia. The war in Ukraine is now dragging into its fifthyear, and the U.S. condemnation of its European Allies for failure to even let planes use their airspace during the Operation Epic Fury in Iran in March is among the two biggest challenges facing Europe’s effort to define itself in the post-Pax Americana world.
The Russia-Ukraine conflict continues with no clear path to resolution, as fighting remains entrenched and diplomatic efforts struggle to gain traction. The prolonged war has deepened economic and geopolitical strain across Europe, sustained elevated security risks, and kept pressure on global energy and defense markets. Despite periodic negotiations and shifting battlefield dynamics, the conflict has settled into a drawn-out stalemate. (Source: Critical Threats)
We suggested the continent’s commitment to Ukraine would eventually collide with an economic model built around expensive energy, social entitlements, climate targets and a bureaucracy that moves like a pension committee trapped inside a fog bank.
The forecast was directionally correct, though more gradual than the headline implied. Europe did not fracture dramatically, and there was no satisfying cinematic moment when a flag came down over Brussels.
Germany abandoned more of its old fiscal restraint as defense spending and industrial subsidies rose. Governments across the European Union struggled to finance military commitments while coping with sluggish growth, high energy costs and domestic politics reshaped by immigration.
The Wall Street Journal reports the scene more vividly than any policy paper could. Around midnight in Brussels, European leaders gathered at the European Council headquarters, known as “The Space Egg,” for what some later called “therapy night.”
The meeting had one theme: how to manage a breakup with America. Emmanuel Macron told the room, “There is no going back,” while Belgium’s prime minister warned that Europe risked becoming “a miserable slave” to the United States. Giorgia Meloni initially argued that Trump could still be reasoned with.
The Greenland episode hardened the mood, of course.
Gradually, the U.S. president’s intentions for the glacial island were taken seriously.
Trump had threatened to seize Greenland from Denmark, French soldiers were deployed alongside Danish special forces, and European leaders began asking whether the United States, in its 250th year, had become something other than the familiar protector of Europe.
Mark Carney, the new Canadian prime minister, was messaging European leaders from a British phone number and arguing that “the old America isn’t coming back.”
That phrase has the dreadful advantage of being plausible. In Empire of Debt, we argued that empires age first in their habits, then in their accounts and finally in the loyalty of their dependents. Europe spent decades complaining about American power while sheltering under it.
Now it is discovered that dependence becomes more humiliating once the patron starts treating the arrangement as a bad commercial lease.
🧾 The Trump Whisperer’s Invoice
Mark Rutte entered this period believing the alliance could still be managed through flattery, procurement and spending promises. The European press called it “flattery diplomacy,” a phrase that sounds like something invented by a courtier who also owns a defense ETF.
Rutte’s private advice to European leaders was simple: give Trump a win. At a Brussels lunch in early 2025, he urged allies to spend 3.5% of gross domestic product (GDP) on defense, a figure below Trump’s 5% demand but far above the old 2% target. The Trump administration later insisted on 5% by 2035, allowing countries to count 1.5% of GDP in broader security-related investments such as runways, bridges, tunnels, cybersecurity and meteorological services.
At last year’s summit in The Hague, the performance was good enough to deliver one good press day. Trump said NATO was no longer ripping off the United States. European leaders praised him in a closed-door session for strengthening the alliance he had threatened to leave. Some leaders tried humor. Bulgaria’s prime minister later said there was laughter in the room, but it masked deep anxiety.
The anxiety did not disappear after the applause.
Carnegie’s Stephen Wertheim now argues that NATO is undergoing a structural adjustment rooted in diverging transatlantic perceptions of interests and threats. In Washington’s language, “burden-shifting” has replaced “burden-sharing,” with the Pentagon moving toward a version of NATO in which Europe leads its own conventional defense while the United States continues to provide the nuclear umbrella.
European defense spending continues to move higher as NATO members ramp up military budgets in response to a more volatile security environment. The push reflects both heightened geopolitical tensions and renewed pressure to meet alliance spending targets, with several countries accelerating procurement of weapons systems, ammunition and modernization programs. (Source: Stockholm International Peace Research Institute)
Sophia Besch, also of Carnegie, puts the European expectation more bluntly. Last year, Europeans hoped flattery, pageantry, burden-sharing pledges and procurement deals would get them through the second Trump term.
This year, they hope to work with Washington to keep the transition’s damage to a minimum. NATO remains more than the American commitment to European defense, but it is not yet worth much without it.
🏭 De-Americanizing the Machine
American allies have begun pushing the gas pedal on an experiment in de-Americanization. Again, we rely on the Wall Street Journal for their look inside the Trump administration discussions with their country counterparts.
France, the Netherlands and other governments are quietly removing American technology from official systems, adopting European open-source software and urging civil servants to avoid Microsoft Teams and Office. They are also studying where they would store data or process payments if friction with Washington escalated.
That is not a symbolic dispute over stationery. Rather, emblems of the “Great Race,” a multipolar world gaining speed and competitive tension.
Europe’s dependence on American software, cloud systems, payment infrastructure, satellite networks, intelligence, weapons authorizations and nuclear guarantees has become a strategic liability in the minds of its own leaders.
Nations whose own empires once governed sea lanes and currencies now have to ask whether their American-made weapons will work if Washington withholds approval.
Two specific instances remain fresh in the minds of military leaders as they gather for the summit tomorrow:
SpaceX (SPCX) CEO Elon Musk never permanently shut down Starlink for the Ukrainian military, but he made two highly publicized decisions to restrict or manage access. The first in Crimea in September 2022 blocked an urgent Ukrainian request to extend service for an attack on Russian naval ships in Sevastopol.
Musk stated he did this to prevent SpaceX from becoming directly complicit in a “major act of war” and to avoid potential nuclear escalation from Russia.
The second, during Ukrainian counteroffensives in late September 2022, Musk temporarily turned off Starlink services in contested or Russian-occupied territories.
Europe faces a strange choice. It wants less dependence on American power without becoming more dependent on Chinese production. It wants strategic autonomy without the fiscal capacity of an empire. It wants to defend Ukraine, rebuild its military, subsidize industry, finance welfare states, manage immigration and lower energy costs, all while writing regulations as though prosperity were a permanent natural resource.
🪖 Ankara and NATO 3.0
The Ankara summit will test whether the alliance can describe its transition without saying too much to confuse allies or enlighten its enemies.
Wertheim says the Pentagon wants progress toward “NATO 3.0,” an alliance focused on deterring attacks on European territory, with European countries taking the lead in conventional defense while America keeps the nuclear umbrella. What Trump wants, Wertheim adds, is whatever Trump decides he wants at the time of the summit.
Trump’s own phrase, “We’ll see what happens,” may be the most accurate policy document on offer.
The Pentagon has announced a Europe-specific review of U.S. troops and bases, but allies still do not know what will stay, what will go, or when. Europeans have begun deploying troops to the Baltics and investing in deep precision-strike capabilities, but they need NATO planning to reflect what American capabilities will actually be available.
Turkey adds another layer. Ankara wants NATO membership to remain central to its security, defense and deterrence interests, while also adapting to a world where no country can operate on autopilot with a single alliance. Turkish officials have said as much.
The Ankara summit gives Turkey a chance to present itself as a pivotal defense and security actor while European governments debate whether a more EU-centered security architecture would leave Turkey on the margins.
That is why the summit may feel oddly theatrical. Rutte will try to keep America inside the tent. Europeans will try to look grateful without appearing servile. Trump will want visible proof that allies are paying more. Turkey will want recognition of its strategic relevance. Ukraine will want air defense interceptors. Russia will want a weakened NATO and every visible transatlantic disagreement replayed in Moscow like a highlight reel.
🔥 Ukraine, Iran and Diminishing Returns
The war in Ukraine remains the alliance’s central military test. Moscow’s offensive has stalled, according to Carnegie’s Nate Reynolds, while Ukraine uses drones to disrupt Russian logistics, threaten Crimea and strike energy and industrial infrastructure far behind the front. Russia is still intensifying strikes on Kyiv and other cities, exposing Ukraine’s shortage of ballistic missile defense.
Europe will again try to persuade Trump that squeezing Moscow is the way to end the war. Trump remains skeptical of increasing pressure on the Kremlin, and the Alaska summit with Vladimir Putin already left Europeans worried that commercial opportunities with Russia might tempt Washington toward terms closer to Moscow’s preferences.
The evolving dynamic between Trump and Putin continues to influence how allies and adversaries assess U.S. foreign policy direction. Any perceived warming or cooling in that relationship carries implications for NATO cohesion, the trajectory of the Russia-Ukraine war and broader East-West tensions. Markets and governments alike remain attentive to how personal diplomacy could translate into shifts in security commitments and strategic alignment. (Source: Getty Images)
The Iran war made the anxiety worse. European leaders had watched Trump’s airstrikes spike fuel prices across the continent, and Germany’s Friedrich Merz reportedly warned that Russia would be the only winner of the Middle East’s newest war.
Britain’s MI6, according to the Journal, concluded that flattery diplomacy was becoming “subject to the law of diminishing returns.”
🇪🇺 Europe Didn’t Break Up, But It Did Get Sullen and Confused
Our second-half forecast is that Europe continues to move toward greater defense responsibility without achieving genuine strategic autonomy. Again, we don’t offer a specific forecast for a grey swan event. Like the bureaucracy in Brussels, this beast is slow and sluggish.
NATO will survive the Ankara summit. The declaration will reaffirm Russia as a long-term threat and repeat the principle of collective defense. Leaders will praise higher defense spending, deeper defense-industrial cooperation and allied unity. Cameras will capture the handshakes, because cameras are merciful and rarely ask about procurement timelines.
Beneath the performance, Europe will keep hedging against American unpredictability. Governments will study data storage, payments, software, cloud systems and weapons dependencies. Defense spending will rise, but fiscal politics will remain ugly. Countries near Russia will move faster than countries farther away. Italy, Spain, Belgium and others will continue treating large defense commitments as politically expensive promises best measured over a decade.
“Good riddance,” Trump’s erstwhile MAGA supporters will say, sick of both European attitudes and the forever war in the Middle East. Trump needs the support during this year’s pivotal midterms. European leaders will keep trying to flatter, contain, redirect and outlast him.
China, for its part, will do what they have been doing: observe the show and try to pick off resources around the globe while the U.S. and Europe are otherwise occupied, navel-gazing.
The tension during tomorrow’s NATO summit will not go away in the second half of 2026. It will shape budgets, elections, coalition talks and EU policy fights as surely as defense spending will.
European voters want cleaner energy, secure borders, more workers, fewer unauthorized crossings, lower industrial costs, stronger militaries and generous welfare states. That is quite a dinner order for a waiter already carrying three plates and a burning sleeve.
That leaves the second-half Grey Swan forecast mostly intact, but more precise.
Europe will not break apart in 2026. It will become more internally contradictory. NATO will ask for more money. Industry will ask for cheaper energy. Voters will ask for border control. Employers will ask for workers. Climate policy will ask for investment. Ukraine will ask for air defense.
Washington will ask for gratitude, contracts and higher spending.
The Balogun episode gives the day its accidental parable. Trump defended his birthright to U.S. citizenship in the match against Belgium, home to the institutions now wondering whether the old American security rule still applies.
Europe is not filing divorce papers, and Washington is not leaving the house. They are arguing over the bank accounts, the locks, the insurance policies, the utility bills, the guest list and who gets to keep the cloud subscription.
~ Addison
P.S. Underneath all the layers of diplomacy, the competitive game for energy and natural resources during the buildout of the global AI intelligence is heating up.
On Thursday, for Grey Swan Live!, we’ll be tapping Shad Marquitz’s expertise in precious and industrial metals, mining and energy to zero in on the base layer of Jensen Huang’s “5-Layer Cake” – strategy for the AI intelligence economy buildout.
Specifically, the “Sovereign Bloc” strategy established when President Trump issued an executive order to form Project Vault.
Background: The 5-Layer Cake is a bottom-up supply chain strategy focused on physical technology and infrastructure. The Sovereign Bloc is a geopolitical risk strategy focused on domestic resilience, national control, and regional trade ties.
If the 5-Layer Cake strategy is about owning the best flour, ovens, and frosting recipe to make a highly profitable treat, the Sovereign Bloc is about a country deciding it wants to own the bakery and grow its own wheat, so no other country can stop it from eating.
