Balancing Act — How Allies Have Responded to Limited U.S. Retrenchment

During President Donald Trump's second term, his administration indicated a desire to retrench militarily from Europe and possibly elsewhere to promote greater allied burden-sharing. Assessing whether this change would advance U.S. interests involves considering several possible effects: the behavior of U.S. rivals, regional stability, U.S. defense budgets, and the behavior of U.S. allies. In this analysis, RAND researchers focus on the last of these effects: the behavior of U.S. allies. The researchers examine the responses of West Germany, South Korea, Japan, and Taiwan in the 1960s and 1970s to a shift in U.S. strategy that involved limited U.S. force reductions and other forms of retrenchment. The United States also sought to stabilize relations with its rivals, the Soviet Union and the People's Republic of China (PRC), in this period. If the Trump administration undertakes a similar strategic shift, these cases can provide a starting point for predicting the likely effects. However, the effects of more-dramatic changes in U.S. strategy would require additional analysis.

The Policy Debate: Two Schools of Thought

Disagreements about how allies would respond to U.S. retrenchment figure prominently in the debate about U.S. global strategy. There are two perspectives in this debate. Deep engagement embraces core elements of U.S. strategy since the end of World War II, including a vast network of alliances and security partnerships, a large forward military presence, and a willingness to use force to defend allies and international norms. Deep engagement assumes that this high level of U.S. military presence in East Asia, Europe, and the Middle East promotes stability, U.S. security, and prosperity. Restraint calls for reduced U.S. military engagement in one or more of these key regions.

Deep engagers and restrainers disagree on how allies will react to retrenchment and the implications for U.S. interests and conflict risk. Deep engagers fear that allies might align with powerful neighbors or lack the resources to balance threats effectively. They also worry that allies might pursue nuclear weapons or engage in destabilizing policies. Conversely, restrainers believe that retrenchment will curb free riding and prompt allies to adopt more-prudent stances toward rivals. They view deep engagers' fears of bandwagoning (i.e., aligning with a powerful aggressor) as exaggerated, while deep engagers see restrainers as overly optimistic about allies' abilities to counter threats without U.S. leadership.

To assess how each ally responded to past U.S. retrenchment, the researchers addressed the following questions:

• What steps did the ally take to try to limit U.S. retrenchment?
• Did the ally shift its alignment away from the United States and toward the shared rival?
• Did the ally increase defense burden-sharing or deepen ties with other partners?
• Did the ally adopt a less confrontational approach toward its rivals or moderate its foreign policy ambitions?

West Germany (1960–1970)

In the early 1960s, the United States was concerned that the cost of maintaining a large military presence in West Germany, or the Federal Republic of Germany (FRG), was unsustainable and threatened to reduce force levels. To forestall such an outcome, in 1961, West Germany committed to buying more U.S. military equipment in U.S. dollars (an arrangement that would come to be known as an offset). Bonn adhered to and extended the agreement for a few years, despite significant fiscal pressures.

Although the United States continued to view the Soviet Union as an expansionist power that threatened the security of Europe, Washington began to implement less hardline policies toward Moscow. This included engagement on a variety of issues, such as the 1961 negotiations over Berlin, in an effort to stabilize the competition.

Despite continued FRG compliance with the offset agreement, the United States grew increasingly concerned about the cost of stationing forces in the country and what U.S. policymakers viewed as inadequate FRG defense spending. After issuing public and private threats to withdraw U.S. forces, the United States reduced forced levels in West Germany in 1966 and again in 1968 (see Figure 1). The United States also more explicitly conditioned its continued presence on Bonn's adherence to offsets.

The y-axis represents the number of U.S. military personnel, ranging from 0 to 300,000. The x-axis covers the years 1961 to 1975. The chart is annotated with the names of U.S. presidents in power.

Presidential terms are marked as follows:

• Lyndon B. Johnson: 1964-1969
• Richard Nixon: 1969-1974
• Gerald Ford: starts in 1974

Key trends and data points:

• In 1961, there were approximately 240,000 U.S. military personnel.
• The number peaked at over 270,000 in 1962.
• From 1963 to 1967, the number of personnel remained above 250,000, with slight fluctuations.
• After 1967, the number declined, falling to about 210,000 by 1970.
• Personnel numbers fluctuated between 210,000 and 230,000 from 1970 to 1975.

Overall, the chart shows a peak in U.S. military personnel in the early 1960s, followed by a gradual decrease through the 1970s, with presidential transitions noted along the timeline.

SOURCES: Features data from Tim Kane, Global U.S. Troop Deployment, 1950–2005, Heritage Foundation, CDA06-02, May 24, 2006; Tim Kane, "U.S. Troop Deployment Dataset," spreadsheet, March 1, 2005.

NOTE: U.S. President Lyndon B. Johnson's administration is depicted as starting in 1964, even though his term officially began in late November 1963.

U.S. force reductions, in conjunction with U.S. diplomatic overtures to the Soviet Union, heightened FRG concerns about further U.S. retrenchment and Washington's commitment to German reunification. However, Bonn still had a relatively high assessment of the U.S. willingness to defend West Germany.

FRG defense spending plans did not change in response to U.S. retrenchment. In fact, later in the 1960s, Bonn reduced defense spending in response to an economic slowdown, even as U.S. retrenchment began to take effect. This modest change in burden-sharing (in this case, committing to offsets but not increasing defense spending) was due, in part, to the fact that Bonn did not anticipate that a complete U.S. withdrawal of forces was imminent. West Germany continued to believe that its security was a vital U.S. interest because it was central to U.S. strategy in Europe and the U.S. global contest against the Soviet Union. This context and an economic slowdown in the mid-1960s explain why Bonn did not increase defense spending in response to retrenchment, as other allies did.

The U.S. approach to retrenchment also complicated West Germany's ability to burden-share through offsets. The United States announced several force reductions without prior consultations and initially rebuffed proposals for alternate offset arrangements that FRG leaders believed were more sustainable, thereby reinforcing the perception that the United States would sacrifice FRG interests and make it more difficult for political leaders to form the coalitions required to meet U.S. offset demands.

In addition to offsets, Germany responded to U.S. retrenchment by strengthening security ties with France. However, divergent national interests — including Bonn's unwillingness to shift toward a foreign policy more independent of the United States (as Paris preferred) — limited the depth of these ties. Ultimately, Bonn saw U.S. support as both necessary and likely to endure, even at a reduced level, and was unwilling to jeopardize that support by striking a more independent path.

After 1966, West Germany shifted to pursuing German reunification through diplomacy and economic engagement. Inflexible U.S. offset demands contributed to the collapse of the government that had attempted to accommodate U.S. demands. These political changes established the conditions for a new leadership to emerge that pursued a new policy of outreach to Warsaw Pact countries that later became known as Ostpolitik.

South Korea (1969–1979)

During the 1960s, the United States furnished substantial military support to South Korea, or the Republic of Korea (ROK), by maintaining an alliance and sizable in-country force and by providing economic and military assistance. In 1969, the United States announced a dramatic reduction in military support as part of the Nixon Doctrine — a policy of burden-shifting to allies in Asia. Although the alliance would remain in place, the United States began reducing its presence in South Korea in 1970. The number of U.S. military personnel dropped by one-third, from about 60,000 to 40,000 (see Figure 2).

The y-axis indicates the number of U.S. military personnel, ranging from 0 to 70,000. The x-axis shows years from 1964 to 1984. The chart is annotated with the names of U.S. presidents in power.

Presidential terms are marked as follows:

• Lyndon B. Johnson: 1964 to 1969
• Richard Nixon: 1969-1974
• Gerald Ford: 1974-1977
• Jimmy Carter: 1977-1981
• Ronald Reagan: starts in 1981

• During Lyndon B. Johnson's presidency, the number of military personnel started above 60,000 in 1964, decreased to below 50,000 around 1966, and then began to rise.
• The number increased during the Johnson and into the Nixon administration, peaking at around 68,000 in 1969 under Richard Nixon.
• After 1970, there was a sharp decline during Nixon's presidency, reaching just above 40,000 by 1972.
• From 1972 onward, the number of personnel remained relatively stable, just above 40,000, with minor fluctuations through the Gerald Ford, Jimmy Carter, and Ronald Reagan administrations.
• By 1984, the number of U.S. military personnel was slightly over 40,000.

SOURCES: Features data from Kane, 2006; Kane, 2005.

Additionally, crises with North Korea in 1968 and 1969 underscored the risk that a conflict on the Korean Peninsula could rapidly escalate and could draw in U.S. forces before decisionmakers in Washington could plan a response. Thus, the United States sought greater flexibility to respond to potential conflicts. The United States reduced its military presence in the demilitarized zone so U.S. troops would be less likely to face immediate attack in the event of a war with North Korea.

Moreover, the United States cut military assistance after a temporary increase to ease the transition to self-reliance. As a result, the military support to South Korea decreased dramatically from $602 million in 1969 to $88 million by 1974. The United States also shifted from providing grants to providing credit to buy U.S. military equipment through the Foreign Military Financing (FMF) program (see Figure 3).

The y-axis shows U.S. foreign aid in constant 1970 U.S. dollars ranging from $0 to $700 million. The x-axis covers years 1964 to 1984. The chart is annotated with the names of U.S. presidents in power.

Presidential terms are marked as follows:

• Lyndon B. Johnson: up to 1969
• Richard Nixon: 1969-1974
• Gerald Ford: 1974-1977
• Jimmy Carter: 1977-1981
• Ronald Reagan: 1981-1984

Two types of foreign assistance are plotted:

• Military aid (blue line with circle markers)
• FMF (Foreign Military Financing) (red line with square markers)

• From 1964 through 1973, military aid (blue) rises from about $200 million to a peak of nearly $650 million in the early 1970s (Richard Nixon's presidency), with a drop in 1970 and a peak in 1972. After 1973, military aid drops sharply to under $100 million and remains low through 1984.
• Foreign Military Financing (red) is negligible until about 1973, after which it rises, peaking around 1976 (during Gerald Ford's presidency) at over $200 million. FMF then declines, leveling off at under $100 million in Jimmy Carter and Ronald Reagan presidencies.

The overall trend shows that military aid was dominant and peaked during the Nixon years, then fell off, while FMF became the main form of foreign assistance after 1974.

Legend: Military aid (blue circles and line) FMF (red squares and line)

SOURCES: Features data from U.S. Department of State, "U.S. Foreign Assistance Complete Dataset," spreadsheet, last updated May 31, 2024. This source reports annual data in current and 2022 constant dollars. We converted each year's 2022 constant dollar figure to 1970 constant dollars with a deflator created by dividing the 1970 value in current 1970 dollars by the 1970 value in 2022 constant dollars.

NOTE: Military aid includes such activities as the military assistance program, international military training and education program, and transfers from excess stock of defense articles, among other programs. FMF, while also classified as military aid in the original source, is separate in this figure and includes all activities under the FMF Direct Loan Program Account. These include U.S. Department of Defense guaranty and direct loans and credit sales under Foreign Military Sales loans.

This retrenchment heightened ROK concerns about its vulnerability to an attack from North Korea and the reliability of the U.S. commitment. South Korea found the U.S. actions particularly alarming because (1) they came after Washington's refusal to retaliate against North Korea's attacks, including one on the ROK presidential residence in 1968, and (2) they came at a time when the United States was pursuing rapprochement with North Korea's two ideological allies, the Soviet Union and the PRC. ROK leaders were also angered because they thought that they were not fully consulted on the partial troop withdrawal, despite South Korea's troop contributions in the Vietnam War. After the reduction of U.S. troops, ROK leaders continued to fear further retrenchment, even when the United States tried to reassure them that no additional cuts would be made.

ROK leaders sought to slow the pace of U.S. retrenchment. They also attempted to gain compensating support from the United States. In 1970, South Korea even launched an illegal influence operation in the United States, seeking to convince members of Congress to provide assistance.

In addition, South Korea increased its own military capabilities in response to U.S. retrenchment. ROK defense spending accelerated from $283 million in 1969 to $552 million in 1974 (see Figure 4). South Korea fast-tracked the development of the country's national defense industry and began its own nuclear weapon program, which it abandoned later (after some resistance) under intense pressure from the Gerald Ford administration.

The y-axis indicates U.S. foreign aid in constant 1970 U.S. dollars ranging from $0 to $2.5 billion. The x-axis shows years from 1964 to 1984. The chart is annotated with the names of U.S. presidents in power.

Presidential terms are marked as follows:

• Lyndon B. Johnson: 1964 to 1969
• Richard Nixon: 1969-1974
• Gerald Ford: 1974-1977
• Jimmy Carter: 1977-1981
• Ronald Reagan: starts in 1981

• During Lyndon B. Johnson's presidency, the expenditure starts at $0, and gradually increases to less than $0.25 billion in 1969.
• The number continued to gradually increase through the Nixon administration, nearing $0.5 billion in 1974.
• Expenditure began to climb steadily after that, reaching about $1.0 billion by the end of Gerald Ford's term in 1977, and above $1.5 billion at the end of Jimmy Carter's term in 1981.
• Under Ronald Reagan, the number slightly spiked in 1983 to over $2.0 billion, and then dropped back a bit in 1984, though still above $1.5 billion.

SOURCES: Features data from Chung-In Moon and Sangkeun Lee, "Military Spending and the Arms Race on the Korean Peninsula," Asian Perspective, Vol. 33, No. 4, 2009. Dollars were converted to 1970 constant dollars using an annual mean gross domestic product (GDP) deflator from Bureau of Economic Analysis, "Gross Domestic Product: Implicit Price Deflator," dataset, retrieved from Federal Reserve Bank of St. Louis, updated April 30, 2025.

NOTE: RAND researchers assumed that the National Defense Tax is included in the defense spending numbers provided by Moon and Lee (2009).

South Korea doubled down on its relationship with the United States and sought to strengthen ties with Japan, thereby succeeding in deepening the economic cooperation that supported its defense buildup. However, lack of shared threat perceptions, historical animosities, and legal and political constraints on Japan's Self-Defense Forces prevented or impeded deeper cooperation.

Although South Korea did not consider realigning toward its rival North Korea, it proposed dialogue on conflicts of interest with Pyongyang. The inter-Korean dialogue was short-lived, as the two sides failed to bridge their differences.

Japan (1969–1975)

In the early 1970s, the United States renewed the Treaty of Mutual Cooperation and Security but also began reducing its presence in Japan. U.S. forces in Japan fell from approximately 85,000 personnel in 1969 to approximately 48,000 personnel in 1975 (see Figure 5). Although the United States initiated most of these posture changes, Japan requested some withdrawals to address domestic political opposition to the U.S. presence in parts of the country.

The y-axis represents the number of U.S. military personnel, ranging from 0 to 90,000. The x-axis covers years 1964 to 1984. A vertical dashed line at 1969 indicates the timing of the Nixon Doctrine and the agreement on the Okinawa reversion.

Key trends include:

• In 1964, personnel levels are high (over 80,000), then drop to about 65,000 around 1965.
• Between 1965 and 1969, personnel levels increase, peaking at just over 85,000 around 1969.
• Following 1969, personnel levels decline steadily throughout the 1970s, reaching approximately 45,000 by 1977 and then stabilizing around that level through the early 1980s, with a slight uptick near 1982 followed by another gradual decline.

SOURCES: Features data from Kane, 2006; Kane, 2005.

Japan feared that its security would be harmed by the scale of U.S. retrenchment. Japan reacted to the U.S. drawdown by trying to limit and shape it. Although Tokyo did not perceive any actors in the region as immediate threats, the government feared the possible effects of U.S. retrenchment on its long-term security and responded in multiple ways:

• Japanese officials stressed the dangers of retrenchment and argued that reducing U.S. troops in Japan would weaken the credibility of U.S. deterrence and make it more difficult for U.S. troops to aid Japan on short warning.
• Japan lobbied to maintain U.S. air, naval, and marine forces in the country.
• Tokyo sought to institutionalize bilateral U.S.-Japan security cooperation. Japanese leaders believed that this would limit future U.S. retrenchment and make it more likely that the United States could intervene quickly in a conflict.
• Tokyo attempted to demonstrate that it was a worthy ally by increasing its conventional capabilities.

Japan increased defense spending because it (1) felt more vulnerable and (2) wanted to show the United States that it was burden-sharing and, therefore, worthy of continued support. Tokyo's defense spending increased in real terms by 53 percent between 1969 and 1976. This was a dramatic increase in a country with strong public opposition to militarization, but these changes were very modest relative to its economic growth, which exploded at the time.

The U.S. double détente with the Soviet Union and the PRC freed Japan to follow a similar course, and although Japan improved its relations with the PRC and sought to do so with the Soviet Union, it showed no interest in realigning with regional rivals. It increased cooperation with South Korea in some defense-related industries but stopped short of cooperation that involved the armed forces.

Taiwan (1969–1979)

The case of Taiwan, formally known as the Republic of China (ROC), presents the most dramatic example of U.S. retrenchment. In 1969, the United States began withdrawing forces from Taiwan while seeking rapprochement with the PRC (see Figure 6). The United States eventually withdrew all troops from the island and ended the mutual defense treaty.

The y-axis represents the number of U.S. military personnel, ranging from 0 to 10,000. The x-axis shows years from 1964 to 1984.

The trend shows a rise in U.S. military personnel starting at about 4,000 in 1964, peaking between 1968 and 1970 at nearly 9,000 to 10,000 personnel. Following 1970, the number gradually declines and then sharply drops after 1973, reaching nearly zero by 1978 and staying at that level through 1984.

Two key vertical lines are annotated:

• At 1969, labeled "Nixon Doctrine," which occurs at the peak of U.S. military personnel.
• At 1979, labeled "PRC-U.S. normalization," which coincides with the period when U.S. military personnel levels remain close to zero.

Overall, the figure highlights the dramatic drawdown of U.S. military personnel after the late 1960s and early 1970s, reaching negligible levels after normalization with the People's Republic of China.

SOURCES: Features data from Kane, 2006; Kane, 2005.

Despite the dramatic change, U.S. retrenchment was not total. The United States enacted the Taiwan Relations Act in 1979, which committed to a lower level of U.S. military engagement. U.S. military assistance to Taiwan fell from a high of more than $250 million a year in 1970 to approximately $20 million a year in 1978 (see Figure 7).

The y-axis shows U.S. foreign aid in constant 1970 U.S. dollars ranging from $0 to $250 million. The x-axis shows the years 1964 to 1978. The chart is annotated with the names of U.S. presidents in power.

Presidential terms are marked as follows:

• Lyndon B. Johnson: up to 1969
• Richard Nixon: 1969-1974
• Gerald Ford: 1974-1977
• Jimmy Carter: starts at 1977

Two types of foreign assistance are plotted:

• Military aid (blue line with circle markers)
• FMF (Foreign Military Financing) (red line with square markers)

Key trends:

• Military aid starts near $90 million in 1964, increases to about $120 million by 1968, then spikes sharply under Nixon to nearly $240 million in 1970, before dropping steeply to around $100 million in 1971 and then to nearly zero by 1975. Military aid remains at or near zero through the end of the period.
• FMF is close to zero under Johnson, rises to approximately $50 million by 1968, sees a dip in 1969, then gradually increases, passing $50 million by 1975, peaking near $70 million in 1976, and then declines to around $10 million by 1978.

SOURCE: Features data from U.S. Department of State, 2024. This source reports annual data in current and 2022 constant dollars. RAND researchers converted each year’s 2022 constant dollar figure to 1970 constant dollars with a deflator created by dividing the 1970 value in current 1970 dollars by the 1970 value in 2022 constant dollars.

NOTE: Military aid includes such activities as the Military Assistance Program, the international military training and education program, and transfers from excess stock of defense articles, among other programs. FMF, while also classified as military aid in the original source, is separate in this figure and includes all activities under the Foreign Military Financing Direct Loan Program Account. These include U.S. Department of Defense guaranty and direct loans and credit sales under FMS loans.

U.S. rapprochement with the PRC was largely conducted in secret. Taiwan's leadership was initially unsure of how rapprochement would affect U.S.-Taiwan relations and sought both to delay PRC-U.S. rapprochement and limit U.S. retrenchment. ROC Premier Chiang Ching-Kuo argued that normalizing with the PRC was reckless and endangered broader U.S. security interests in Asia. He also reminded U.S. officials of Taiwan's role as a steadfast ally and key part of the U.S. security network in East Asia. Ultimately, these appeals did little to limit U.S. retrenchment; they failed to prevent U.S. troop withdrawals, the end of the defense treaty, or PRC-U.S. normalization. The Taiwan Relations Act was a consolation prize driven more by Congress's long-standing support for the island and frustration with being cut out of the executive branch's initiatives than by Taipei's lobbying during this period.

Although the PRC posed little immediate threat, Taiwan reacted by strengthening its own defenses as the United States retrenched. Taipei cut force levels to increase efficiency, diversified arms suppliers, developed domestic arms production capability, and explored anti-communist security cooperation with Southeast Asian countries.

U.S. policy changes in this period, including lack of support for Taiwan's goal of retaking mainland China, contributed to Taipei's reorienting of its military away from offensive operations and toward defensive operations. Therefore, even as the regime's declared goal of reunification remained unchanged, Taiwan's actions show that it had scaled back its ambitions.

Taiwan hedged against complete U.S. retrenchment but prioritized retaining U.S. security ties. As part of this goal, the ROC government halted talks with the Soviet Union that might jeopardize U.S. relations and scaled back its nuclear weapon program under U.S. pressure.

Key Findings About Responses to U.S. Retrenchment in History

In four historical cases (West Germany, South Korea, Japan, and Taiwan) in the 1960s and 1970s, the United States made two strategic adjustments: It reduced its military presence in some allied countries and sought to stabilize relations with U.S. rivals. Table 1 lists the key changes by country. In sum, allies responded to the shift in U.S. strategy in the following ways:

• Their first reaction was to attempt to prevent, limit, or shape U.S. retrenchment.
• Allies did not shift alignment away from the United States or realign to side with threatening powers.
• Some allies sought to deepen ties with alternative partners, but differing threat perceptions and alignment preferences limited these relationships.
• Allies strengthened their ties with the United States to maintain as much of the U.S. commitment as possible and remained responsive to U.S. concerns.
• Allies' levels of perceived vulnerability and U.S. commitment, as well as economic conditions, affected how much these states increased investments in their own defense.
• The most vulnerable U.S. ally, South Korea, initiated a nuclear weapon program but abandoned it (after some resistance) under intense U.S. pressure.
• U.S. retrenchment did not have a consistent effect on allies' purchases of U.S. military equipment.

Ally	What Steps Did the Ally Take to Try to Limit U.S. Retrenchment?	Did the Ally Increase Defense Burden-Sharing or Deepen Ties with Other Partners?	Did the Ally Shift Its Alignment Away from the United States and Toward the Shared Rival?	Did the Ally Adopt a Less Confrontational Approach Toward Rivals or Moderate Its Foreign Policy Ambitions?
West Germany	West Germany accepted politically unpopular offset spending.	West Germany began offset spending to lessen the U.S. economic burden but did not increase defense spending. West Germany deepened ties with France to a limited extent.	No	West Germany pursued diplomatic and economic engagement with Warsaw Pact countries after U.S. offset demands contributed to a change in its government.
South Korea	South Korea appealed to the U.S. executive branch and to Congress to limit retrenchment.	South Korea increased defense spending, strengthened its defense industrial base, and began a nuclear weapon program. South Korea sought deeper ties with Japan and gained cooperation on some defense-related industries.	No	South Korea engaged in (ultimately unsuccessful) negotiations with North Korea.
Japan	Japan argued that retrenchment would weaken deterrence. Japan promoted institutionalized bilateral U.S.-Japanese security cooperation.	Japan increased defense spending and began collaboration with South Korea in some defense-related industries.	No	Japan improved ties with both the PRC and the Soviet Union in this period as a result of the U.S. policy of dual détente rather than retrenchment.
Taiwan	Taiwan lobbied U.S. leaders to preserve defense ties.	Taiwan increased defense spending.	No	Taiwan functionally abandoned plans for invading mainland China.

Applying these lessons today requires care. Analysts should consider how proposed U.S. strategic changes and allies' circumstances differ from those found in the past.

Applying Historical Findings to Contemporary U.S. Alliances

When the United States pursued limited retrenchment and détente with the Soviet Union and the PRC during the Nixon administration, allies in Asia responded largely as the United States hoped. Allies remained aligned with the United States, increased defense spending, deepened regional cooperation (albeit to a limited extent), and moderated their foreign policies. The FRG case had similar dynamics but also showed that economic challenges and an ally's perception that its security is a vital U.S. interest can dampen its incentives to spend more on defense. The ROK case highlights that U.S. retrenchment can increase a vulnerable ally's incentives for nuclear proliferation and that the United States can (with difficulty) use its remaining commitment as leverage to slow or halt such programs.

Applying these findings to the modern day requires care. The more similar contemporary U.S. strategic changes are to those found in these cases, the more likely they are to produce similar effects. That said, modern-day U.S. allies are more economically intertwined with the PRC than allies were with rivals during the Cold War, raising the possibility that retrenchment could have different effects on allies' alignment choices. For example, modern-day allies in Europe (who are less threatened by the PRC's military power than the PRC's neighbors) might be more likely to shift alignment away from Washington on issues involving Beijing compared with the allies in these cases.

RAND researchers found that aspects of allies' responses to U.S. retrenchment depended on their individual circumstances, such as their threat perceptions or economic conditions. RAND researchers' review of the existing international relations literature found that there are other conditions, beyond those considered in this research, that might also play a role in the future (see Table 2). These findings suggest that if an ally's circumstances have changed over time, its contemporary response to retrenchment will differ from its own historical response. For example, Japan faces a much greater threat from the PRC today than it did during the Cold War, so it would likely have a more robust response to retrenchment today. For example, it might accelerate current trends, deepening ties with other like-minded states in the region much more than it did in the 1970s. Making detailed predictions about an individual ally's response to future U.S. retrenchment, therefore, requires systematically accounting for its existing circumstances.

Circumstance	Shift Alignment Toward Rival	Devote More Resources Toward Internal Balancing	Deepen Ties with Alternative Partners	Adopt a Less Hardline Approach Toward the Rival	Rein In Foreign Policy Ambitions
Ally's perceptions and domestic politics
High threat perceptionsa	Less likely	More likely	More likely	Less likely	More likely
Revisionist ambitions directed at a nonrival state	More likely
Perception that ally's security is vital to the United States		Less likely	Less likely	Less likely	Less likely
Domestic instability		Less likely		More likely	More likely
Economic strength and growth		More likely
High elite consensus on foreign policy		More likely	More likely	More likely
Retrencher's policies
Greater level of retrenchment		More likely	More likely	More likely	More likely
A less hardline approach toward the rival		More likely	More likely	More likely	More likely
Regional factors
Availability of alternative partners	Less likely	Less likely	More likely

NOTE: Blank spaces indicate that the literature does not suggest a clear prediction.

^a Although the literature suggests that states generally balance more as threat perceptions rise, it also expects a tipping point, after which a highly vulnerable state might see balancing as hopeless and bandwagoning as a better alternative.

Moreover, the Trump administration might undertake strategic changes that are very different from these Cold War cases. For example, dramatic shifts in the U.S. relationship with Russia, major changes in economic relations with allies, or U.S. territorial expansion would create dynamics that require additional analysis to assess. As of May 2025, the RAND Center for Analysis of U.S. Grand Strategy has such analysis underway, considering how the strategic options that the Trump administration might pursue would affect the behavior of key U.S. European allies, given their existing strategic and domestic contexts.

Recommendations

RAND researchers suggest the following recommendations for U.S. policymakers considering retrenchment.

Manage allies' opposition to retrenchment while incorporating their input about implementation. U.S. policymakers have historically kept plans confidential to prevent allies from derailing retrenchment. However, involving allies in discussions when implementing retrenchment can help to establish a relationship after retrenchment that aligns with U.S. interests.

Do not expect limited retrenchment to uniformly improve burden-sharing. Although U.S. retrenchment has encouraged some allies to increase burden-sharing in the past, effects can vary. Allies' vulnerability and economic conditions will affect how much they are willing to spend on defense.

Weigh nonproliferation against burden-sharing goals. U.S. retrenchment increases allies' feelings of vulnerability, which in turn can lead them to boost production of conventional arms and to initiate or accelerate nuclear weapon programs. In the 1970s, U.S. policymakers often assured allies about remaining U.S. commitments to stop them from pursuing nuclear weapon programs. These assurances, in turn, sometimes undercut the pressure to invest in conventional defense capabilities that retrenchment was meant to incentivize. To navigate these trade-offs, contemporary policymakers need to decide which outcomes are most important and which risks they can accept.

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Topics

• China
• Germany
• International Diplomacy
• Japan
• Military Budgets and Defense Spending
• Peacekeeping and Stability Operations
• South Korea
• Taiwan
• United States