American isolationism isn't a new phenomenon. Were it not for the Japanese attack on Pearl Harbour, America would likely not have come to Europe's defense in the Second World War. Trump's threat to leave NATO and leave Europe to defend itself should not be seen as an unprecedented shift in international policy but rather a "regression to the mean", a return from an outlier event to a more normal--meaning more frequently occurring--state of affairs. The US' role in establishing and being the strongest defender of the international rules-based order might be seen as an aberration rather than the new normal†.
One of the reasons that the US favored the international rules-based order is international trade. The General Agreement on Trade and Tariffs (GATT) and its successor, the World Trade Organization (WTO) established the Most Favored Nation rules which were designed to open the foreign markets to US exporters, markets that had previously been protected by tariff barriers. Similarly, access to international labor markets allowed American manufacturers to produce at lower labor cost than had production been carried out in the US.
While free trade economists are right that moving activities to the places that create the most value (i.e., are performed at the lowest possible cost) is Pareto optimal, at a national level they ignore the social implications of how that newly created wealth is distributed. Some of the value has gone to the labor forces of the countries to which jobs have been outsourced; much has gone to the shareholders of the corporations that took advantage of offshoring. Little has accrued to the hollowed-out working and middle classes. Cheaper Chinese-made goods are of no benefit to families who can't afford to put food on the table (or their next prescription).
While government might have addressed the problem with a more progressive redistribution of wealth, America's emphasis on individualism made this nigh on impossible, so the rich have gotten richer while everyone else has been left in the dust. The result has been disillusion with the system and the international trading system.
Enter Donald Trump. While some of what he wants to do with tariffs is wield geopolitical influence, he also appears to want to reshore jobs that were offshored over the last 30 years. As the economic rationale for the international rules-based order dissipates, so does America's interest in maintaining it. That bolsters America's isolationist tendencies. Providing a security umbrella for Europe is expensive and constraining. As the US considers its interests vis-à-vis China and Taiwan, being tied to the defense of Europe may seem to Trump to be an anachronism with little value for America. Hence Vance's vitriol towards "the Old World" and Trump's threat to leave NATO.
Hence Europe's "fork in the road". If it can no longer rely on the protection of the US' military might and its nuclear umbrella, it faces a choice: either create a European defence alliance strong enough to deal with Russian territorial ambitions, or make an alliance with one of the other two world powers, Russia or China. Since Europe seems incapable of the kind of economic and political commitment that would be required to mount a credible military defence against Russia, an alliance looks like the only viable option.
Russia is an economic disaster and wields power largely through two levers; its stockpile of nuclear weapons and its willingness to provide access to markets to countries that have been barred from the world's "regular" trading system. However, allowing Russia to reemerge as the Eastern Bloc would be a betrayal of its values and its commitments to the ex-Soviet Bloc countries that have joined the European Community.
That leaves China. China's (or rather Xi's) objectives are murkier than Putin's. Perhaps it simply wants to establish a new world order that is not dominated by America. If that is indeed the extent of its ambitions, then an alliance with China looks like a "better deal" for Europe and with Russia. However, as we return to a mercantilist world order, Europe must come to grips with the fact that even a Sino-European alliance almost certainly will not afford the military protections America provided in the latter half of the 20th century.
So in the last analysis, Europe must either bury its many hatchets, and emerge as a viable collective military force or face a future in which it becomes a pawn on the geopolitical chessboard, buffeted by the whims of three powerful and self-interested actors, Russia, China, and America.
† Many of the things we have thought of as "normal" may in fact be temporary departures from the norm. Communism in Russia and China have both given way to some form of individual incentive-based systems that might broadly be termed "capitalism".
