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I don’t disagree with your analysis, but it seems worth mentioning that, from Trump’s perspective, threatening europe with the prospect of reneging on long-established security guarantees is a great way to exert leverage on a recalcitrant and fractious Europe. Trump is nothing if not transactional.

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Yes, that's a core part of the argument. By treating a security guarantee is purely transactional and interest-based, it undermines the value of the guarantee. It only works if potential aggressors know exactly what the consequence of an invasion would be. Of course, he still may choose to support NATO countries if only because war in Europe is bad for the stock market, but the American publics' wavering means that other countries planning 10-20 years out now have an interest to look to themselves. The public may even celebrate that they are increasing the defense spending and not relying on the US so much, but the nature of the risk will change.

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The best way to understand Trump—and I say this not as an endorsement of him—is to understand the transactional and litigious nature of the NYC real estate market in which he cut his teeth.

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