Last week, we talked about Europe’s scramble to convince the world it can credibly pursue “strategic autonomy” (in the words of Christine Lagarde, ECB President) — self-funding their defense, energy and AI buildout, without restarting the European sovereign debt crisis of 15-years ago.

Beyond Trump’s use of tariff and military security bargains to influence change in Europe, there’s a more immediate and combustible bargaining chip coming in May — the U.S. financial security chip.  

Under a new Trump-appointed Fed Chair, if implicit U.S. financial support (like access to dollar liquidity) becomes “conditional” for Europe, then they have a problem.  It would quickly expose the liquidity and then solvency vulnerabilities.

That’s why European leaders are pre-emptively running a confidence management campaign, promoting big plans, aggressive timelines and promises.

But why put that pressure on a critically important Western ally?  

As we’ve discussed over the past year, the Trump administration’s desire for change in Europe has everything to do with countering China’s influence, and restoring U.S./European alignment.

Remember, we’ve looked at this Pew Survey several times over the past year.  As you can see, China has gained significant influence over Europe, and largely stemming from its role in bailouts, following the sovereign debt crisis in Europe more than a decade ago.  

This leads us to this Marco Rubio’s speech this past weekend at the Munich Security Conference.

Marco didn’t hold any punches.  He formalized the move from “implicit” to “conditional” support — by calling out Europe’s “foolish” policies on climate, migration, deindustrialization as anti-sovereignty and self-harming.

He reset the alliance on the basis of “reciprocity and seriousness.”

He evoked the history of “godless communist revolutions” and terminal decline of the 1940s Europe.

And he said the U.S. seeks “renewal and restoration” of Western civilization.  This was an invitation to do it together — “join us.” 

Otherwise, the message has become clear that Europe is not entitled to automatic U.S. backstops (Trump’s leverage).

And as JD Vance said last year at the AI Action Summit in Paris, just days into the Trump administration’s term, partner with the U.S. or “chain your nation to an authoritarian master” (i.e. China).