The Context
On 4 December 2025, the Trump administration released a National Security Strategy that fundamentally recalibrates the U.S.-Europe relationship. This is not a policy tweak. It is a strategic rupture. The document directs stronger language at European allies than at Russia, explicitly aims to cultivate political resistance within European nations, and frames Europe as a secondary security arena. This follows the June 2025 NATO summit, where President Trump secured a commitment for members to spend 5% of GDP on defence by 2035—a target Spain openly opposed and Belgium and Slovakia have signalled they will not meet. The INSS analysis of the summit characterised the outcome as Europe’s surrender to the American president.
The Risk
For a New Zealand director of a multinational, this is a profound strategic shock. Your business plan for the next decade likely assumes a stable transatlantic alliance underpinning global trade, security, and diplomatic norms. That assumption is now invalid. The risk is not a headline; it is a failure of your duty of care. Section 131 of the Companies Act 1993 requires directors to exercise the care, diligence, and skill a reasonable director would exercise in the same circumstances. A reasonable director in 2026 cannot ignore a documented, state-driven campaign to politically destabilise a core market. If your European operations suffer because you failed to scenario-plan for this specific, published U.S. strategy, you may be personally liable for failing to properly assess a material, foreseeable risk. This is a textbook governance failure in the making.
The Control
You must immediately mandate a geopolitical stress test. This is not an academic exercise for the strategy team. It is a board-level interrogation of every major assumption about Europe. Model scenarios where the U.S. security guarantee weakens, triggering national protectionism and supply chain fragmentation. Map your exposure to European political instability, specifically the rise of far-right parties the U.S. strategy explicitly seeks to bolster. Quantify the cost of decoupling from U.S.-led tech and defence standards if Europe accelerates its strategic autonomy. This is not about predicting the future; it is about proving you have rigorously tested your strategy against the new reality.
The Challenge
These are the critical questions you should be raising at the board table:
|
|
When was the last time our risk register was stress-tested against a primary source document—the 2025 U.S. National Security Strategy—that names our key allies as a problem to be managed? |
|
|
What is our quantified exposure to a scenario where the 5% NATO defence spending target triggers a European recession by 2029, crippling consumer demand in our largest export market? |
|
|
Do we have a playbook for managing operations in a European country where a U.S.-backed populist government comes to power and unilaterally alters our regulatory or tax environment? |