By Qamar Bashir
Press Secretary to the President (Rtd)
Former Press Minister, Embassy of Pakistan to France
Former Press Attaché to Malaysia
Former MD, SRBC | Michigan, USA
Two World Wars and centuries of conflict taught Europe one of history’s bitterest lessons: divided nations repeatedly went to war, while interconnected nations had much more to lose by fighting each other. From the ruins of World War II therefore emerged an extraordinary experiment—not merely to prevent another war through military deterrence, but to make war economically irrational.
France and Germany, once bitter rivals, placed coal and steel—the very industries essential for warfare—within a common institutional framework. Economic cooperation gradually expanded into a common market and ultimately the European Union. Today that Single Market connects about 450 million people and 26 million businesses in an economy worth roughly €18 trillion. The European Commission estimates that the Single Market itself has increased EU GDP by 3–4 percent and created about 3.6 million jobs. citeturn1search0turn1search7
That is the measurable dividend of interdependence. Europe did not eliminate national interests; it created a system in which pursuing those interests through cooperation became more profitable than pursuing them through confrontation. Around 60 percent of EU exports still go to other EU members, demonstrating how deeply these economies have become intertwined. citeturn1search16
North America developed its own version of this philosophy. When NAFTA began in 1994, trade among the United States, Canada and Mexico stood at roughly $300 billion annually. Within less than two decades it had exceeded $1 trillion. Today, under its successor USMCA, U.S. goods and services trade with Canada alone was about $872 billion in 2025, while trade with Mexico approached $964 billion. Together, the North American relationship supports nearly $2 trillion in annual U.S. trade. citeturn1search6turn0search10turn0search12
These are not merely numbers. They represent factories designed around continental supply chains, Canadian energy powering American businesses, Mexican manufacturing feeding American assembly lines, American services flowing north and south, and millions of consumers benefiting from specialization and economies of scale.
Security followed much the same logic.
NATO created collective deterrence through Article 5: an armed attack against one member would be treated as an attack against all. The alliance helped create a security umbrella under which Western Europe could rebuild and prosper. Today European NATO members and Canada alone spend more than $570 billion annually on defense in constant 2021 dollars, demonstrating that NATO has evolved into far more than an American security subsidy. In 2025 alone, their defense expenditure increased by nearly 20 percent in real terms. citeturn0search11
Yet NATO was created for collective defense—not to compel every member to participate automatically whenever another member independently enters a war.
This distinction became critical during America’s confrontation with Iran. President Donald Trump criticized NATO allies for refusing to provide the military assistance Washington expected. He complained that NATO “just wasn’t there” and suggested that if European allies were absent when America needed them, Washington might reconsider being there when they needed America.
That interpretation fundamentally changes NATO’s logic. If American protection becomes conditional upon whether allies participate in unrelated U.S.-initiated wars, collective security becomes transactional security. The immediate casualty is not necessarily NATO’s military capability; it is confidence in the guarantee underpinning that capability.
The same transformation is now occurring economically.
The United States and Canada spent generations constructing one of the deepest economic relationships anywhere in the world. Yet following the collapse of their latest negotiations, Washington has imposed 50 percent tariffs on roughly $20 billion of Canadian goods. Canada has announced retaliatory tariffs, while Prime Minister Mark Carney says Washington’s final demands were economically unacceptable and included restrictions affecting Canada’s freedom to pursue trade agreements elsewhere. citeturn0news46turn0news49
That is where trade policy begins crossing into sovereignty.
America has every right to negotiate aggressively, protect strategic industries and demand reciprocal market access. But attempting to influence whom another sovereign country may trade with transforms economic interdependence from a source of shared prosperity into an instrument of political leverage.
Canada refused, with Carney reducing the disagreement to a memorable conclusion: Washington asked too much and offered too little.
The economic consequences will travel in both directions. The latest tariffs directly cover only around 5 percent of Canadian exports to the United States, so they alone are unlikely to dismantle the continental economy. But their significance lies in the precedent and in their interaction with existing disputes involving steel, aluminum, automobiles and lumber. citeturn0news49
Tariffs are initially paid by importers. Depending upon competition and supply alternatives, some of that burden may be absorbed by businesses and some passed to consumers through higher prices. Canadian exporters meanwhile face reduced competitiveness in their largest market. Retaliatory tariffs then impose similar pressures in the opposite direction.
The greater cost, however, may emerge over years rather than months.
If Canada concludes that dependence upon the American market has become a strategic vulnerability, it will logically accelerate diversification toward Europe, Asia and other markets. Companies will redesign supply chains. Governments will seek alternative suppliers. Investment decisions will increasingly incorporate political risk once largely absent from U.S.-Canada commerce.
Europe faces a similar calculation on security. If American military guarantees appear conditional, European governments have greater reason to develop strategic autonomy. Ironically, NATO allies are already moving dramatically in that direction: European allies and Canada added more than $90 billion in real defense spending in 2025 alone. citeturn0search11
Here lies the paradox of Trump’s strategy.
American power after World War II did not rest solely upon military superiority, nuclear weapons, the dollar or the enormous American market. Its greatest multiplier was an international network of countries that voluntarily tied their prosperity and security to the United States.
Trump increasingly treats those dependencies as bargaining chips: military protection can leverage greater defense commitments; market access can leverage trade concessions; and alliance solidarity can become a test of support for American military campaigns.
There is legitimate logic behind demanding fair burden-sharing. Allies should contribute adequately to their defense, and trade agreements should provide reciprocal benefits. But demanding fairness within an alliance is fundamentally different from weaponizing the alliance itself.
The first can strengthen partnerships. The second teaches partners to reduce their dependence.
That is why the present confrontation extends far beyond tariffs or NATO spending. Europe spent generations discovering that interdependence could transform former enemies into partners. North America spent three decades building production and trade networks worth trillions of dollars. NATO spent nearly eight decades constructing something even harder to quantify: confidence that allies would stand together when genuinely attacked.
These systems took decades to build because trust accumulates slowly.
It can disappear remarkably quickly.
Trump may secure individual concessions by exploiting America’s extraordinary economic and military weight. But if the longer-term result is a Canada searching for alternative markets, a Europe preparing to defend itself without assured American support and allies designing supply chains specifically to reduce exposure to Washington, tactical victories could produce strategic losses.
America helped build the postwar system because its leaders understood that prosperous allies, integrated economies and collective security multiplied American power.
The danger today is that by weaponizing those very interdependencies, Washington may achieve the opposite: turning countries that once considered dependence upon America an advantage into countries determined never again to depend upon it.
