What if the US Abandoned the EU?

Oct 20, 2026  Trump says US could 'leave' Europe—but won't say what that means. A vague but pointed threat from the president lands amid French riots and an unpopular Iran war, and it collides with legal limits on any actual NATO exit.

 

Trump's latest pronouncement about the US leaving Europe raises a counterfactual question I can answer with different versions of the  EUL20 Model (see below). The graphic above compares time plots of the EUL20 US-input, BAU (Business-as-Usual) and RW (Random Walk) models. 

The results indicate that, historically, a US-Exit would have lost a lot of growth. However, the US-input has been cyclical and is forecast to start dropping around 2030. After 2045, US-input is no better than BAU (no input). And, after 2050, US-input creates collapse in the EUL20 Model.

In other words, US-input might look necessary right now and US-Exit might appear catastrophic, but in the long run the  EUL20 Model (and the EU Economy) are headed for a Steady-State Economy.

Let me emphasize, we have no idea how a modern, Steady-State Economy  would perform. It might be full of conflict and contradictions as Late-Stage Capitalism comes to an end. Both France and Italy are heading for a Steady-State Economy and both are dealing with Polycrises. From Google AI:

Karl Marx would probably analyze the Trump Administration as a symptom of Late-Stage Capitalism. Essentially, Trump is trying to circle the wagons to defend the US from the Polycrises he sees coming.

The final Crisis of Capitalism will not be smooth sailing for any country in the World-System and no one knows what the end result will be.

For more information on the EU, see Blog Roll: European Union.

Notes

• Was the EU Wrecked by Austerity? No.
• Is Another EU Recession Likely? Maybe.
• Is the EU Heading for a Steady State Economy? Maybe!

EUL20 Measurement Model

The EUL20 Model has three Principal Component State Variables: EU1 = (Overall Growth), EU2 = (CO2 - LU)  Emissions-Unemployment Controller  and EU3 = (LU - GDP- N) an Unemployment Controller. All three state variables explain 99.6% of the Variation in the Indicator Variables taken from the World Development Indicators (WDI).

EUL20 AIC Statistics

Seven Models were estimated and compared with the Akaike Information Criterion (AIC). In the shot-term, the Random Walk (RW) Model was best. The best attractor model took input from the Economy of China (CNL20 Model).

EUL20 BAU Model

The EUL20 BAU Model is stable and might reach a Steady-State Economy after 2100 (see Is the EU Heading for a Steady State Economy?).

EUL20 US-Input Model

The EUL20 US-Input model is unstable. Cyclicality in the EU1 State Variable is the result of cycles in the US Economy.