The Atlantic Alliance Under Strain: 3.5% Odds of US NATO Withdrawal by March

The Trump administration's skepticism toward NATO has generated markets on what was once unthinkable: American withdrawal from the Atlantic alliance. Current probability for official withdrawal by March 2026 stands at just 3.5%—low but meaningfully above zero for an outcome that would reshape global security.

The Low But Non-Zero Probability

At 3.5%, forecasters see NATO withdrawal as unlikely in the near term but not impossible. This reflects:

Rhetorical precedent: Trump has repeatedly questioned NATO's value and criticized European defense spending. The sentiment exists at the highest levels.

Legal uncertainty: The president's authority to unilaterally withdraw from NATO is constitutionally contested. Congress has attempted to limit this power, but legal questions remain.

Practical barriers: Withdrawing from NATO would require disentangling decades of military integration—bases, command structures, intelligence sharing, nuclear arrangements. This cannot happen in weeks.

Bureaucratic resistance: The defense establishment, State Department, and intelligence community strongly oppose withdrawal. Implementation would face internal resistance.

Why Even 3.5%?

The probability isn't zero because:

Announced intention: A presidential announcement of intention to withdraw would trigger the market, even if implementation takes years.

Negotiating tactic: Threatening withdrawal might be used as leverage for European concessions on trade, burden-sharing, or other issues.

Policy evolution: The administration's approach to alliances has been unpredictable. Rapid policy shifts are possible.

What Withdrawal Would Mean

U.S. departure from NATO would fundamentally reshape global security:

European defense vacuum: American military capabilities—particularly nuclear deterrence and logistics—cannot be quickly replaced by European allies.

Russian opportunity: Without American commitment, Russia's calculus on European expansion changes dramatically.

Asian implications: U.S. treaty allies in Asia would question American commitment to their defense, potentially spurring nuclear proliferation.

Economic disruption: Defense industries, basing arrangements, and trade relationships built around the alliance would face upheaval.

The Congressional Check

Congress has attempted to constrain presidential withdrawal authority. The National Defense Authorization Act includes provisions requiring Congressional approval or lengthy notification periods. Whether these provisions would survive legal challenge is unclear—but they create procedural barriers.

A president determined to withdraw might simply ignore these provisions and dare Congress to respond. The 3.5% probability captures scenarios where political will overcomes institutional resistance.

European Response

NATO's European members have begun hedging. Increased defense spending, discussions of European defense autonomy, and closer integration among EU militaries all reflect reduced confidence in American commitment—even without formal withdrawal.

The alliance is already changing in response to American ambivalence. Formal withdrawal would accelerate existing trends rather than creating entirely new dynamics.

Market Interpretation

The 3.5% probability should be read carefully:

• It's high enough to justify contingency planning
• It's low enough that markets expect the alliance to survive near-term
• It likely rises over longer time horizons as administration policy crystallizes
• It could spike suddenly on unexpected announcements

Conclusion

NATO has survived American skepticism before, but never at the presidential level in the post-Cold War era. At 3.5% for near-term withdrawal, forecasters believe institutional barriers will likely hold—but the fact that these markets exist at all signals a genuine shift in transatlantic relations. The alliance may survive, but its character is already changing.

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Analysis informed by aggregated forecaster data from Manifold Markets as of January 20, 2026.