The price of Trump’s transactional diplomacy

Lord Palmerston would not have dreamed that he might one day shape American diplomacy from beyond the grave. Yet the spirit of his 1848 boast to the House of Commons that Britain had ‘no eternal allies, and no perpetual enemies’ seems to be underpinning the Trump administration’s current approach to NATO.

At the alliance’s Ankara summit in July, European leaders braced themselves for a revival of rhetorical menace towards Greenland and remarks about an imminent US withdrawal from Europe. On the surface, the White House has almost whipped European defence spending into shape since last year’s Hague summit, and a new transatlantic bargain still appears plausible, thanks largely to the salesmanship of Nato General Secretary Mark Rutte, who credited Trump for the shift that ‘makes Europe more relevant for the United States as a partner’. By NATO’s own rhetoric, instead of commitments and principles, the international order now appears to rest on explicit demands for a quid pro quo. Yet history warns that such transactional diplomacy, while alluring, can also be a trap for those who pursue it.

It seems unlikely that President Trump reads Hansard, the record of British parliamentary debates that stretches back to 1803. Nonetheless, his art-of-the-deal approach channels the impulses of Lord Palmerston’s approach to statecraft: as Britain’s foreign secretary and later as prime minister, he was a hard-nosed realist, unsentimental about alliances. This might seem to place Trump in distinguished company. Leaders today, however, are learning the wrong lesson from history. What was eternal to Palmerston was the pursuit of interests; unlike principles, interests shift suddenly, sometimes drastically. When statesmen today prioritise an immediate transactional payoff over long-term commitments, they will find that material interests can prove to be just as fleeting as alliances.

If there are no eternal allies, there are no eternal interests, either. Alliances based on principles and periodic renegotiation – i.e. diplomacy – offer a better pathway, even for those who champion national interests.

A durable world order was once forged in the aftermath of two generations of war and wreckage – not in the 1940s, but after Napoleon’s final exile to St Helena in 1815. The Concert of Europe came together to suppress revisionist powers and reinforce the status quo. Much like the United Nations Security Council, five dominant countries – Britain, Russia, Austria, Prussia and, after 1818, France – served as the gatekeepers. And for decades, this 19th-century order largely succeeded in keeping the five out of conflict. Henry Kissinger adopted the Concert as a blueprint for his statecraft, praising the system, somewhat sanguinely, for its legitimacy and balance of power. Yet what Kissinger’s idealised view overlooks is how the order died. This was not the result of a grand rupture, but the slow accumulation of calculated transactions and decisions in the ensuing decades.

Take Austria and Russia, supposedly the most long-standing and intimate of allies, as an example. In 1849, Tsar Nicholas I’s army saved the Habsburg throne, crushing the Hungarian Revolution for the Austrian Emperor (and junior partner). Vienna’s return offer, a few years later, was to refuse to support Russia’s military expansion in the Balkans without guarantees for Austria’s own border security. Failing to receive a quid pro quo, the tsar condemned Austria as an ungrateful ‘free rider’ on Russian protection. This was not a one-off: there are parallels to be found in the diplomacy of the Cold War, a century later, when Moscow would lose yet another calculating junior partner in Beijing during the Sino-Soviet split, contributing to the Soviet Union’s eventual capitulation and collapse.

These ruptures attest to the treachery of transactional diplomacy, which is destructive not because pursuing transactions is ruinous per se. Rather, it is because great powers possess a wide array of competing interests, making it unpredictable which specific priorities will prove most appealing during any given transaction. The very interests that coalesced into seemingly intimate alliances could be superseded by other more immediately demanding priorities just a few years later. This turns an alliance system into a collection of ad-hoc coalitions with little permanence and a great deal of frustration.

When the pursuit of fluid interests permanently takes precedence over a commitment to enduring principles – such as collective security – striking a Faustian pact with rivals can appear tempting. But to indulge that temptation would be to misinterpret the true meaning of Palmerston’s words.

If the future barely counts, why refuse to snatch immediate gains? Because, in time, a deal with the devil will invariably end in disaster. In the 1807 Treaty of Tilsit, Napoleon secured a non-aggression pact with Tsar Alexander I, in which a secret article contemplated the partition of the Ottoman Empire. The Faustian bargain seemed mutually advantageous: it bolstered the Continental System’s economic blockade against Britain while serving Russia’s imperial ambitions in the East. But the trust was thin. The secret Article VIII explicitly excluded access to Constantinople, the tsar’s true desire, while Alexander, for his part, gradually re-opened ports to British commerce as the blockade strangled his economy. Five years later, Napoleon crossed the river Neman and invaded Russia. The interests of both parties had changed.

In the 1840s, arch-rivals Britain and Russia repeated an identical backroom deal over the Eastern Question, whose eventual rupture during the Crimean War (1853-56) broke 40 years of peace in Europe. The Faustian pact of 1939 between Hitler and Stalin also brought the world hurtling towards the cataclysm of the Second World War.

The world now finds itself sliding towards a similar trap. At the Ankara summit, NATO member countries fought an uphill battle to convince the US president – who attributed his attendance solely to his personal rapport with the Turkish president – that defending Europe was still a lucrative bargain. Ostensibly, it worked. Trump’s transactionalism has driven European defence spending higher and procurement quicker, essentially correcting the continent’s ‘free riding’ tendencies. European countries, for their part, acknowledged the necessity of the American nudging.

But, past the victory lap, the summit may lead to several unintended consequences for the United States. A closer examination shows that Europe is surreptitiously keeping the money within the continent’s own defence-industrial base, reducing its US defence spending. More alarmingly, over the long term, what if allies begin to see NATO’s Article 5 collective security guarantee as being akin to a subscription up for annual renewal? That may incite hubris from revisionist powers. The current transactional drift should be treated as a dangerous aberration, rather than a return to some imagined historical glory. Yes, Palmerston was right: the pursuit of interests is eternal. At the same time, the interests themselves are constantly in flux, and short-sighted transactional wins might well create new incentives and generate new threats to a country’s national interests at a later date.

This does not mean that Europe erred in placating Washington. Europe today is ill-positioned to resist transactionalism, just as 19th-centuryAustria was transactional, not for want of character but for want of capacity. A Europe with growing economies, abundant energy, integrated capital markets and lighter regulation could avoid re-negotiating Article 5 at every summit. Even if, for now, one side of the Atlantic indulges in transactionalism, believing it to be a higher form of the diplomatic art, the other side must resist the erosion of principles and prevent the contagion of transactionalism from outlasting political actors who champion it. The enduring lesson of history warns that when short-term, calculated interests replace shared values in a world order, Faustian pacts may buy brief respites and delay doomsday – but its arrival will only be more incalculable and ruinous.