Europe’s Opportunity in Disruption: A Baltic Perspective

United States (US) President Donald Trump’s second term in office is already sending shockwaves throughout Europe. A tense February 2025 meeting in the Oval Office with Ukrainian President Volodymyr Zelenskyy quickly spiralled into a confrontation, underscoring a deepening transatlantic rift over the future of support for Ukraine in its war against Russia; Trump told the Ukrainian leader that he was “gambling with World War III.” At the same time, he repeatedly praised Russian President Vladimir Putin, calling him a “genius.” Trump also cast doubt on NATO commitments and warned that America would defend allies “only if they pay enough for their own defence.”

Days before the Trump-Zelenskyy meeting, when the United Nations voted on a resolution condemning Russia’s war, Washington had sided with Moscow, aligning itself with a small group of states, many of them globally regarded as pariahs. For many across Europe, the vote was a five-alarm fire signal: if Washington was no longer willing to censure aggression through diplomacy, could its long-standing commitment to transatlantic security still be considered reliable? With each successive jolt Trump delivered, Europe began to fear that he might well sever the US’s link with the North Atlantic Treaty Organization’s (NATO’s) Article 5, its very foundation. That apprehension was clear at NATO’s summit at The Hague in June 2025, where allies decided to shore up their individual defences, adopting a landmark pledge to allocate 5 percent of each participating country’s gross domestic product (GDP) to defence. But by mid-summer, the mercurial Trump had pivoted: expressing disappointment with Russian President Vladimir Putin, he approved the transfer of US Patriot missile defence systems to Kyiv via NATO allies, and threatened to slap triple-digit tariffs on Russia should it refuse to de-escalate.

The pivot does not erase Trump’s earlier equivocation, but it does lead to cautious optimism that the link between the US and Europe— though battered—can hold, and perhaps even grow stronger.

A Baltic Reading of the Stakes

For Lithuania, Latvia and Estonia, NATO is not an abstraction; it is the essence of the transatlantic bond. Since 2019, roughly 1,000 US soldiers— an Abrams tank equipped battalion under Operation Atlantic Resolve—have been rotating through Lithuania. No European power can replicate America’s rapid reinforcement capacity; US military presence carries a deterrent weight far greater than the number of its troops or equipment on the ground.

Germany’s historic decision to base a 5,000‑strong armoured brigade in Lithuania by the end of 2027 is also reassuring. Germany’s Chancellor Friedrich Merz said on his visit to Vilnius in May 2025: “Lithuania’s security is also our security.” For the Baltic countries, the German unit must supplement, not replace, the American battalion. While heavy armour deters tanks, effective deterrence must also address Russia’s grey-zone tactics. Over the past 15 months, at least 11 undersea power and data cables in the Baltic Sea have been cut, with investigators linking the incidents to Russian auxiliary vessels loitering nearby with transponders switched off. Estonia’s regulator logged hundreds of GPS‑jamming incidents in 2024, most traced to Kaliningrad or Pskov in Russia. And Kremlin critic Leonid Volkov was beaten up with a hammer and had his arm broken outside his Vilnius home in March 2024—an assault that Lithuanian intelligence attributes to Russian special services.

For NATO, attacks of this sort pose a unique challenge—they often stay below the Article 5 threshold for armed attack. But their very ambiguity makes strong deterrence and resilience essential to prevent escalation and avoid miscalculations—outcomes neither side of the Atlantic can afford.

Disruption as Opportunity

Trump’s shock therapy has delivered what Europe long promised but seldom provided—money. The NATO Hague Summit Declaration sets a two-tier benchmark—3.5 percent of GDP for core defence and 1.5 percent for resilience—by 2035. The Baltic States are already there or racing beyond: Lithuania will spend 5.25 percent of its budget on defence in 2026, Estonia has locked in 5.4 percent through 2029, and Latvia crosses 5 percent in 2026.

Disruption has also set Brussels in motion. In May, the Council of the EU adopted the Security Action for Europe (SAFE) instrument, empowering the Commission to raise €150 billion (USD 176 billion) in joint debt for common procurement. Soon after, finance ministers activated the national escape clause in the Stability and Growth Pact, allowing EU member states to exceed deficit limits so long as the excess funds were used for defence.

SAFE can provide Europe’s defence sector with a predictable, cost-effective financing mechanism by spreading borrowing across the EU and linking the funds to multinational programmes. At present, an estimated €25 to €100 billion (US$29- 117 billion) is being squandered by member states each year because effective defence cooperation is limited.

Baltic officials argue that true autonomy can only be built on smart interdependence—shared supply chains with US firms, intellectual property (IP) sharing among European states, and regional specialisation. Such a model emerged when Lithuania’s state-owned Giraitė Armament Factory (GGG) signed a memorandum of understanding (MoU) with the Norway-headquartered defence company NAMMO and the Virginia-based arms and space manufacturer Northrop Grumman at the NATO Defence Industry Forum meeting in June 2025, to co-produce 35 mm ammunition, effectively anchoring part of the US stockpile on NATO’s eastern flank.

Lithuania has also emerged as one of Europe’s most assertive voices on China. It has rejected Chinese investment in strategic sectors and allowed the opening of a Taiwanese Representative Office in Vilnius in November 2021—prompting Beijing’s diplomatic and economic retaliation.

Undeterred, Lithuania has doubled down on its alignment with the US’s Indo-Pacific priorities, partnering with Japan on Ukrainian de-mining, and expanding cooperation with it on cyber security and undersea infrastructure protection. In March 2023, India opened its embassy in Lithuania, signalling growing interest in economic cooperation.

The EU’s current stance on China is more defined than in past years—recognising Beijing as a partner for cooperation, but also as an economic competitor and systemic rival—capturing the layered complexities of the transatlantic approach.

Energy and Economic Links

If military steel embodies deterrence, liquefied natural gas (LNG) exemplifies economic opportunities. Lithuania’s floating storage and re-gasification unit Independence, operating out of Klaipėda since 2015, marked its 500th cargo transfer this spring. Virtually all of its LNG imports come from the US or Norway. The Klaipėda unit enables Lithuania, its Baltic neighbours, and parts of Central Europe, to cut out Russian gas entirely. Each LNG shipment underscores that transatlantic ties reinforce Europe’s independence—not just in matters of defence, but the core of its energy resilience.

Yet the wider economic relationship is under strain. A last-minute US–EU accord announced on 28 July 2025 scaled back President Trump’s threatened 30 percent tariff to a 15 percent ‘baseline’ levy on most European goods, in exchange for EU pledges to spend USD 750 billion on US energy and invest USD 600 billion in the US over the next three years. The deal has averted an immediate trade war, but it still raises average duties on EU exports to the US from roughly 1 percent to about 17 percent, a shift many European leaders warn will dent growth and competitiveness. Even under the new tariff regime, the transatlantic economy remains the world’s largest commercial artery—goods and service flows topped an estimated US$2 trillion in 2024, and European firms directly employ 5.3 million Americans while US companies support 4.6 million European jobs. Energy is already helping to rebalance the transatlantic ledger: growing US exports of LNG and crude oil are chipping away at the EU’s merchandise surplus. If Washington seeks a more symmetrical trade relationship, every tanker arriving in Klaipėda, Wilhelmshaven, or Świnoujście moves it one step closer.

Defence spending, energy security, and trade policy are interlinked. Weakness in one area can undermine the others, while progress across all three strengthens the transatlantic partnership and reinforces strategic stability

The Way Forward

The takeaway from Trump’s actions on his return to the US presidency is that US election results can shake, but not break, the transatlantic bond. Trump’s rhetoric, the US’s UN votes on the Ukraine war, and flirtation with Putin has forced Europe out of complacency—and triggered NATO’s biggest defence spending commitment.

The Baltic response is grounded in realism. Vilnius, Riga, and Tallinn are spending above 5 percent of GDP, hosting both US and German forces, and treating each severed cable or GPS jam as part of a broader, undeclared aggression by Russia. The Baltic States are pushing Brussels to turn SAFE funds into real capability and remind Washington that a secure eastern flank reinforces US security and credibility.

In the Indo-Pacific, Lithuania has aligned with US priorities—limiting Chinese investment and withstanding retaliation for its outreach to Taiwan. It is a calculated move that signals solidarity and shared interests.

Disruption may be a risk but it is also a chance to adapt. With aligned strategy and committed resources, the transatlantic vessel stays on course. The seas are rough, but the structure holds—and the crew is alert.