America risks making frenemies of old allies
Neither re-industrialisation nor US security can be achieved with the current White House approach
Rana Foroohar
America seems to have no friends these days, only frenemies.
That’s not a reflection on the rest of the world, but rather on the Trump administration.
In the current age of great power conflict, the US desperately needs solid allies to help it reindustrialise and counter both China’s economic and political influence and Russia’s growing aggression in Europe, both of which have been on display recently.
But for every step forward, this White House takes two steps back.
Consider the recent US-Japan investment “alliance”, in which one of America’s greatest allies in Asia will have to accept 15 per cent tariffs in exchange for the privilege of pouring $550bn into the US economy.
Even after recouping its investment, it will reap just 10 per cent of the ultimate gains.
Then there were the US Immigration and Customs Enforcement raids on a Hyundai factory in Georgia, which came only two weeks after South Korean executives met American peers in Washington to celebrate their country’s contributions to US industrial revitalisation.
Donald Trump, meanwhile, announced that India — which was supposed to be America’s big Asian hedge on Chinese decoupling — had “been lost” to “deepest, darkest China”.
The US president called on Europe to put 100 per cent tariffs on both countries, which continue to buy Russian oil.
I was in Europe, most recently Finland, as all this news was breaking.
Given that the US is shifting towards a Monroe doctrine-like approach of protecting not the world but just the western hemisphere, and in particular the American homeland, Finland is an ally that really matters.
It sits on the border of Russia, and is crucial to Arctic security, given its strong maritime presence in what is becoming a key defence front for the US.
The Chinese and Russians are transporting more natural resources through the Northern Sea Route, which runs close to both Canadian and US borders.
They are also militarising the region, which is one of the biggest remaining sources not just of natural gas and oil but of the rare earth minerals necessary for both defence and the green transition.
Finland’s President Alexander Stubb and Trump are buddies (Stubb is a politically savvy golfer who has spent time in red state Florida), and Stubb has become a conduit between Europe and the US.
One of the most interesting “friendshoring” deals of recent years is that between the US, Canada and Finland to build icebreakers.
Finland and Canada are already moving ahead — they began construction of their first jointly built ships, for the Canadian Coast Guard, to be manufactured at the Helsinki Shipyard, two weeks ago.
But while big promises have been made between US companies and Canadian and Finnish partners, and Trump has called for new icebreakers to be in the water “within 36 months”, no US contract has been signed yet.
That’s something the administration should fix, pronto, particularly given that just last week, Davie, the Canadian owner of the Helsinki Shipyard, actually pledged to put $1bn into a new icebreaker facility in Texas once they have a signed contract.
That follows a separate partnership announcement in July from Bollinger, a US shipbuilder working with Finnish companies Aker Arctic and Rauma, and Canada’s Seaspan.
You would think, with Russian drones being shot down over Poland and Israel attacking Qatar seemingly without US approval, that the White House would at least be focused on pushing through a small deal that is crucial to the western hemisphere story, as well as broader military and commercial supply chain security.
Icebreakers had been positioned, by both the Biden and Trump administrations, as the first step in larger US shipbuilding partnerships with both Europe and Asia, to counter China’s dominance in maritime logistics.
But even as Trump talks big about ships, he demoted the White House maritime office from the National Security Council to the Office of Management and Budget and has alienated the Canadian government with an unnecessary trade war.
This isn’t how you do smart industrial policy.
Re-industrialisation and western hemisphere security require the right hand to know what the left is doing, and that’s a problem within this White House.
They also require friends, not frenemies.
Both the US and Europe need each other to create resilience in the face of closer Chinese and Russia co-operation.
But while it was a good thing that Trump roundly condemned Russian aggression in Poland last week (he and Putin are the original frenemies), I’m not optimistic about deeper US-EU co-operation yet.
It’s a huge risk for the EU to move into a full-blown trade war with China and India just because Trump — the most unreliable president in US history — demands it as the price for help with Ukraine.
Europeans are already reeling from Trump’s fresh tariff threats on countries that “discriminate” against American tech companies.
Perhaps most importantly, as one Finnish official put it to me last week, “friendshoring requires deep trust from the participants”.
The problem is that Trump doesn’t really do trust.
His approach to both politics and economics is transactional and short-term.
That’s a bad way to deal with friends and enemies alike.
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