Russia’s Repeat Failures
Moscow’s New Strategy in Ukraine Is Just as Bad as the Old One
Russian President Vladimir Putin’s invasion of Ukraine has reinvigorated the Western alliance and bolstered transatlantic solidarity. After being declared “brain dead” by French President Emmanuel Macron in 2019, NATO has sprung to life, deploying forces to its eastern flank and coordinating the provision of sophisticated weapons that have helped Ukraine impede Russia’s invasion. For the first time in its history, the European Union has financed the purchase and delivery of lethal aid. Western countries have vastly exceeded expectations in implementing coordinated financial sanctions that have crippled Russia’s economy. Even neutral Switzerland joined the fray.
But no matter how remarkable this solidarity may be in the short term, there is no guarantee that it will last: if policymakers are complacent, powerful trends predating the Ukraine crisis could overwhelm and ultimately derail it. Protectionist sentiment and self-defeating trade wars have pulled at the seams of Western economic integration. Former U.S. President Donald Trump’s threats to pull out of NATO and the chaotic withdrawal from Afghanistan in 2021 have chipped away at military trust between the United States and Europe. A Marine Le Pen victory later this month in France would pose additional challenges to the alliance, and looming concerns about the 2024 presidential election raise doubts about the United States’ commitment.
If not managed intelligently, the reawakening of Europe as a diplomatic and military actor and the reexamination of global economic interdependence catalyzed by Russia’s invasion could result not in a strengthened transatlantic alliance but in a more worrying outcome: the emergence of three distinct blocs, one centered around the United States, a second around Europe, and a third around China (which would include Russia). Such a world—with the United States and Europe often collaborating, but also at odds when their interests diverge—would make the management of China and Russia more difficult, as the two would have opportunities to trigger and exploit U.S.-European tensions. It would also represent a major missed opportunity for the United States and Europe.
To avert such an outcome, Washington must move quickly to reverse the troubling trends in the transatlantic relationship—and thereby seize this opportunity to lock in renewed Western unity for the long haul. On the economic front, that will mean curbing economic nationalism and accelerating integration within the Western world—going from a “Made in the U.S.A.” mindset to a “Made in the Alliance” one. On the military front, it will require reversing the steady pullback of the United States from Europe and redoubling the U.S. military presence on and commitment to the continent. The events of the past few months have demonstrated the strength of the transatlantic alliance when its members act together. It would be a historic misstep not to harness the potential of that collaboration, shoring up the foundations of transatlantic unity—ensuring, among other things, that strengthened ties can survive whatever happens in the 2024 U.S. presidential election.
In recent years, Washington seems to have forgotten how economic cooperation can serve geopolitical ends. Over the past decade, and during the Trump administration in particular, the United States has instituted protectionist measures—from steep tariffs on allied goods to domestic content rules—that have undermined Western solidarity just when it is needed most. After World War II, the Bretton Woods system and the Marshall Plan underwrote postwar recovery while tightening geopolitical ties between the United States and Europe. And European integration—first through the 1957 European Economic Community, and then through its successor, the European Union—has fostered peace on the continent and brought former Warsaw Pact countries into the West.
Washington’s blind spot on transatlantic trade is especially problematic. Despite Europe’s importance as a strategic ally, and the fact that it is the United States’ largest trading and investment partner, the United States and the EU do not have a dedicated free trade agreement in place and trade frictions abound: as of January 2022, according to the World Trade Organization, the United States has engaged in significantly more trade disputes with the EU (55) than with China (39). Tensions were exacerbated in 2017, when the United States halted efforts to forge the proposed Transatlantic Trade and Investment Partnership, and a year later when Trump launched a high-profile trade war with allies in Europe (and beyond), slapping tariffs on solar panels, washing machines, steel, and aluminum.
The United States has more recently made good progress in patching up trade ties with its allies. It resolved the 17-year dispute with the EU over subsidies to Boeing and Airbus; eased steel and aluminum tariffs on the EU and United Kingdom (as well as Japan); and in September 2021 launched the U.S.-EU Trade and Technology Council, a new body designed to coordinate policy on critical technologies and deepen transatlantic trade and economic relations. Yet many disputes remain unresolved. Washington, for example, still needs to implement the global minimum tax agreed to with OECD countries in October 2021, as part of a deal to end European digital taxes aimed at U.S. technology companies.
Washington’s blind spot on transatlantic trade is especially problematic.
Domestic content rules are another unnecessary source of tension. In March, the Biden administration announced expanded “Buy American” provisions that increased domestic content requirements for federal procurement from 55 percent today to 75 percent by 2029. These rules not only cause friction with U.S. allies; they also cost the U.S. government $100 billion annually, according to the Peterson Institute for International Economics.
What such policies fail to take into account is that trade with most U.S. allies has a very different economic impact in trade with countries with markedly lower per capita GDP. Economists have debated the scale of the “China shock”—the role of Chinese exports in causing job loss in domestic manufacturing and dragging down wages—but whatever the outcome of that debate, it is not directly relevant to trade with NATO allies such as Canada, France, or the United Kingdom. These are developed economies with high wages and generally stringent labor and environmental standards, and so the effects of trade with them on low- and middle-income American workers is very different than the effects of trade with developing countries. The politics are different, as well: majorities of Americans view trade with the EU (as well as with Canada and Japan) as “fair,” while only 30 percent say same about trade with China.
“There is only one thing worse than fighting with allies,” British Prime Minister Winston Churchill once said, “and that is fighting without them.” Even when their value is clear, alliances are hard to establish and even harder to maintain. The glue of any coalition is trust among its members, and trust can’t be surged in a crisis—it must be built up over time. For over 70 years, NATO’s members have built up trust; in spite of much political bickering and animosity, Washington’s NATO allies have trusted the United States and respected its leadership. Yet in the years before the Russian invasion of Ukraine, this hard-won trust had begun to erode.
At the height of the Cold War, the U.S. military presence in Europe was around a half million troops. Today, the Ukraine crisis has temporarily pushed the U.S. military presence in Europe to 100,000 troops, but fewer than 40,000 soldiers are permanently stationed on the continent. Trump’s threats to withdraw from NATO and his administration’s effort to close military bases and reduce the U.S. presence in Europe were never fully executed, but the message it sent to U.S. allies was damning. More recently, the United States’ withdrawal from Afghanistan left NATO allies in the lurch, struggling to justify their involvement with the United States over the past 20 years after being caught off guard by the speed and timing of the pullout.
Russia’s invasion of Ukraine has steeled the Western military alliance and reinforced the importance of NATO. But despite the unity now on display, those ties could fray in the months and years ahead. Germany’s pledge to dramatically increase defense expenditure marks a fundamental turning point in European security, setting Berlin on the path toward becoming the world’s third-largest military spender, behind the United States and China. The EU, meanwhile, has taken tentative steps toward greater defense cooperation, with the creation of a rapid reaction force as part of its Strategic Compass concept. And Macron has used the Ukraine crisis to reiterate calls for “strategic autonomy,” declaring, “We cannot depend on others to defend us.”
Greater European defense spending and enhanced capabilities are good for the alliance and should be encouraged. But unless they are coupled with more vigorous U.S. engagement, they could sharpen disagreements between the United States and Europe, and even exacerbate tensions within the continent, as countries on the EU’s eastern flank still look to Washington, rather than Brussels, as the primary guarantor of their security.
The Ukraine crisis presents a generational opportunity to reinforce the economic foundations of the Western alliance and to begin building a super bloc of Western economic power. The United States and Europe together represent around 40 percent of global GDP; add U.S. allies such as Japan, the United Kingdom, and Canada and this bloc accounts for more than half of global GDP. Crushing financial sanctions on Russia have demonstrated the economic power of the alliance and its ability to inflict devastating costs on its adversaries. The war has also turbocharged transatlantic cooperation on energy, prompting an increase in natural gas exports from the United States to Europe: at one point in January, U.S. exports to Europe were even higher than those from Russia. This momentum should be harnessed to strengthen trade and economic ties that endure beyond the current crisis.
That will require broadening the frame of U.S. economic thinking, to encompass the broader alliance rather than just the United States. Policies to increase economic resilience and enhance competitiveness in key industries of the future—such as semiconductors and green technologies—should involve Western allies and partners, rather than prioritizing narrow U.S. economic interests. One way to encourage greater integration would be to strengthen coordination on screening related to national security concerns. The Committee on Foreign Investment in the United States (CFIUS) plays a central role in facilitating foreign investment, requiring, for example, mandatory filings and review for investments in critical technologies. The current CFIUS “safe harbor” for investments from Australia, Canada, New Zealand, and the United Kingdom eases transactions with those countries by removing bureaucratic friction. This safe harbor should be extended to other key allies, such as France, Germany, and Japan.
Another way to enhance integration would be through a commitment to resolving outstanding trade disputes and removing economic irritants, including by rethinking the role of domestic content requirements. Federal procurement rules could encourage inputs from allied rather than just domestic suppliers, moving from “Buy American” to “Buy Allied.” This could be accomplished through a collective procurement agreement, which would reciprocally open allied government procurement to U.S. products. The electric vehicle tax credits currently under consideration in Congress, similarly, could be extended to apply to vehicles made in allied countries or with allied content, rather than just American content.
The reorganization of supply chains—given the shock of the pandemic, the war in Ukraine, and growing tensions with China—presents a related opportunity. Some of this process is happening organically, but it is being shaped by public policy: the Biden administration’s 100-day supply chain review in June 2021, for example, resulted in a number of initiatives meant to shift production, of everything from critical medicines to advanced batteries, closer to home. As the world reconfigures supply chains, there is an opportunity to reinforce alliance relationships by incentivizing greater reliance on Western partners. The United States and the EU should accelerate supply chain cooperation initiated by the Transatlantic Trade and Investment Council, focusing, for example, on interalliance coordination on the mining and processing of critical minerals necessary for renewable technologies. And U.S. lawmakers should enhance allied partnership provisions in the innovation and competition bill currently under negotiation in Congress, including the creation of an interagency Technology Partnership office at the State Department to facilitate cooperation with allies and increasing funding for research in collaboration with other Western partners. As Treasury Secretary Janet Yellen noted recently, “Favoring the friend-shoring of supply chains to a large number of trusted countries …will lower the risks to our economy as well as to our trusted trade partners. We should also consider building a network of plurilateral trade arrangements to incorporate elements of the modern economy that are growing in economic importance, especially digital services.”
The Biden administration can also use the crisis in Ukraine as an opportunity to reshape the military landscape and revitalize U.S. leadership on the continent. One element of that should be an increase in the size of the U.S. military presence in Europe. That should include enhancing the U.S. posture in the Baltic States, Poland, and Romania, as Chairman of the Joint Chiefs of Staff Mark Milley recently suggested. The United States should set up permanent bases on the eastern flank of NATO to help reassure allies on the front lines of Russian aggression, significantly bolstering the pre-crisis rotational presence that numbered only in the low thousands. This could include at least three additional U.S. Army brigade-equivalent units permanently stationed in Poland, Romania, and Germany that would continually rotate through other vulnerable eastern flank nations, including the Baltics. This should be coupled with enhancing U.S. naval presence in the waters of the Mediterranean and the North Atlantic, increasing both consistent deployments and naval exercises with our Western partners.
NATO, meanwhile, can be enhanced both by welcoming Sweden and Finland, which are newly considering membership, and by tightening NATO ties with critical Pacific allies—turning the NATO alliance into an essential hub of Western military cooperation around the globe. The recent NATO announcement on enhanced cooperation with Australia, Japan, New Zealand, and South Korea was a good step. This cooperation should be codified in NATO’s Strategic Concept at the upcoming Madrid Summit in June, and include more frequent military exercises and exchanges, both in Europe and the Pacific.
Such steps are necessary even as the war in Ukraine continues to rage. The opportunity that the United States has today—to revitalize the transatlantic alliance for the long haul—won’t last long. If used wisely, it can reinforce military cooperation while building a super bloc of Western economies. Letting it slip by would be a massive—and unforced—strategic error.
Why the War in Ukraine May Not Revive the West