Trump Sets in Motion a Reassessment of Global Agreements

When Donald Trump took office in 2017, he disrupted the familiar world order. Most global leaders opted for a wait-and-see approach, betting that his presidency would be a temporary detour in U.S. history.

Now, at the start of his second term, he is no longer merely a rule-breaker—he is becoming the architect of a new era to which others must adapt. Trump’s diplomatically packed June began with a meeting in the Oval Office with Germany’s new chancellor, Friedrich Merz. Merz made it clear he intended to forge a new phase in relations with Washington, pledging to increase Germany’s long-underfunded defense spending. A former corporate lawyer, Merz is showing far more resolve on this issue than his predecessor and political rival, Angela Merkel, whom Trump largely avoided engaging during his first term.

Next on Trump’s schedule is the G7 summit, held at a mountain resort in Canada. After that comes a meeting in the Netherlands with NATO leaders—many of whom clashed with him during his first term. Ironically, the alliance is now poised to endorse an increase in defense spending to levels once deemed excessive—the very kind of commitment Trump had long demanded.

Yet the agenda remains fraught with sensitive issues. Allies are uneasy about the prospect of new trade tariffs and Trump’s renewed overtures to Vladimir Putin—a leader most NATO countries view as their principal threat. A potential reduction in America’s military presence in Europe could destabilize the security architecture that has for decades relied on the U.S. as its cornerstone.

"This is not a temporary episode, but a durable shift in American politics," says Peter Rough, director of the Center for Europe and Eurasia at the Hudson Institute. "Foreign leaders now have to take Trump’s proposals seriously, rather than waiting for a return to the old playbook under someone like Joe Biden," he explains.

In the coming days, as Trump meets with leaders of democratic nations, their willingness to accommodate his position will serve as a barometer of how much the global order has shifted. Friedrich Merz came to the Oval Office well prepared—diplomats noted that he had consulted in advance with Keir Starmer, Emmanuel Macron, and other leaders who had managed to emerge from similar meetings with their reputations intact.

To win Trump over, Merz opted for a personal touch—presenting him with a framed copy of the birth certificate of Trump’s grandfather. The gesture was a subtle nod to the former president’s fondness for touting his "good genes" and his past demand that Barack Obama produce a similar document. The chancellor also offered generous words of thanks—something Vice President J.D. Vance had hoped to hear from Volodymyr Zelensky back in February. Merz went on to flatter Trump by saying that the U.S. had already played a pivotal role in ending one war in Europe—and could do so again.

Still, the 40-minute conversation was not limited to pleasantries. Despite Trump veering off into asides about egg prices and his relationship with Elon Musk, Merz held a firm line—particularly on Ukraine, where Trump has often suggested that both Kyiv and Moscow bear responsibility for the war’s outbreak. When Trump lamented battlefield losses without naming the culprit, Merz cut in: "People are being torn apart exclusively by Russian missiles targeting Ukraine. Ukrainian weapons have never done anything comparable inside Russia."

Looking down and expressionless, Trump clarified that he had meant combat between soldiers, but added, "You can say that too—about cities. Cities are suffering as well."

Despite their differences, the meeting revealed a clear thaw—especially compared to Trump’s frosty relationship with Merkel. He even joked that Germany’s military buildup was making him nervous: "He’s very, very good to deal with. He’s difficult—in a good way. Can I say that? It’s a compliment. You wouldn’t want me to say you’re easy, right?"

The stakes for world leaders in these talks are extraordinarily high. Trump is inclined to revisit the foundational principles that have underpinned alliances, global trade, and the entire postwar system built around U.S. leadership. After the Cold War, America actively exported market values to emerging economies, with bipartisan support for lowering trade barriers.

But under Trump, the playbook has changed. In April, he imposed the highest tariffs in a century—only to suspend them shortly after, forcing allies back to the negotiating table. Even if new trade agreements are signed, they are unlikely to eliminate Trump’s core demand: a 10% universal import tax. In the shadow of a threatened 60% tariff, that now looks like a compromise—though just months ago, such terms would have been deemed unacceptable.

For America’s allies, it amounts to a direct blow to consumers and industry. Germany’s automotive sector—central to its export economy—is especially vulnerable. Yet Berlin cannot negotiate separately: trade policy rests with the European Union, which speaks on behalf of all 27 member states.

At the same time, NATO is nearing agreement on raising defense spending to 5% of GDP—a target once seen as implausible. The timeline and accounting rules are still under discussion, but movement in that direction is already underway.

When Trump demanded at the 2018 Brussels summit that NATO raise its spending target to 4%, the idea seemed out of reach. At the time, he threatened to "act alone"—a comment his advisers interpreted as a possible signal that the U.S. might exit the alliance if others failed to boost their budgets.

Still, the current increase in defense spending isn’t solely the result of Trump’s pressure. Following Russia’s invasion of Ukraine, questions of collective security have become existential. Europe is preparing for the possibility of a major war on its own soil. Trump’s return to office—and his ambiguous stance on Ukraine—has only heightened the sense of urgency.

"He did move things—in the right direction. The burden needs to be shared more fairly," says John Bolton, Trump’s former national security adviser and now a vocal critic.

Other proposals remain more nebulous. The president continues to advocate for making Canada the 51st U.S. state, along with Greenland—a self-governing territory of Denmark. There is no consensus on these ideas, nor on the future direction of U.S. policy on Ukraine. Nevertheless, the Ukrainian delegation has been invited to both the G7 summit and the NATO meeting.

In his first term, Trump often seemed like an outsider among world leaders. Now—after nearly a decade as president or ex-president—he is seen as a figure whose views must be taken seriously. Among the current G7 leaders, not one was in office when Trump was inaugurated in 2017. Even within NATO, only a handful remain. The rest have learned how to create a setting that makes him feel at ease—hence the emphasis on opulent palaces, grand ceremonies, and protest-free motorcade routes.

"At the G7 summit, he’ll feel much more at ease and confident than he did in his first term," says John Bolton, who accompanied Trump to the 2018 summit, where the president abruptly withdrew from the joint communiqué and publicly rebuked Justin Trudeau. According to Bolton, Trump’s relationships with several leaders have improved significantly since then.

"If he has a good personal relationship with a leader, then relations between the countries are good. If not, diplomacy falls flat. He views everything through a personal lens," Bolton explains.

For Trump’s partners, however, things are more complicated, notes Kori Schake of the American Enterprise Institute: "He believes he can treat allies harshly and they’ll still make favorable decisions. But humiliating partners only makes their job harder—it becomes difficult for them to explain to their voters why they should support the U.S."