An American promise is looking more doubtful as the US upends traditional geopolitics, with repercussions in global financial markets, according to Quantum Strategy’s David Roche.

In an interview with CNBC on Tuesday, he declared that “NATO is dead,” with President Donald Trump distancing the US from long-time European allies and warming up to the Kremlin, which was underscored by his recent shouting match with Ukrainian President Volodymr Zelensky.

That makes Russia’s Vladimir Putin and China’s Xi Jinping the big winners, as they see confirmation of their views that democratic powers are on the decline, Roche explained.

“The big loser is actually the US, because nobody will trust a US treaty again,” he added, noting that a lot of so-called Global South countries will fall into China’s orbit as a result.

Trump has long been skeptical of NATO and complained that member countries aren’t spending enough on defense.

But since his first term, they have stepped up their outlays, with three-fourths now spending 2% of their GDP or more on their militaries after just the US, UK and Greece met that benchmark in 2015, according to a tally by the Associated Press.

Still, Trump has demanded allies continue boosting expenditures and warned on Thursday that the US won’t come their aid if they don’t.

“If they don’t pay, I’m not going to defend them. No, I’m not going to defend them,” he told reporters in the Oval Office.

While some European leaders have publicly maintained that they still see the US as an ally, they are also preparing for a world without a US security shield.

The European Union recently announced plans to increase defense spending by more than $800 billion, as it seeks to step up support for Ukraine while the US pulls back.

Roche predicted Europe will need five to six years, or perhaps even more, to reinvigorate its military capabilities. Meanwhile, the geopolitical turmoil has implications for global financial markets.

“So you want to buy defense,” he told CNBC. “You want to keep out of the euro and own the yen, which is now the new safe haven as the US is getting to look very dangerous and US exceptionalism will suffer from the costs of Trump’s commercial tariffs.”

Others have also warned that his tariffs could prompt countries to retaliate outside of the trade arena, including in the debt markets and currency markets by de-dollarizing.

But even before Trump’s return to the White House, there has been growing wariness about the dollar. That’s after the US and its allies imposed sanctions on Russia following its invasion of Ukraine three years ago.

In particular, the freezing of Russia’s dollar and euro assets sparked concerns among other countries that their own greenback holdings could be threatened one day too.

China and Russia have led the de-dollarization movement to reduce their reliance on the dollar in international trade transactions and central bank reserves.

Nassim Taleb, who wrote the book The Black Swan about unpredictable events, has warned that the sanctions and their repercussions are creating risks for the dollar.

“So I’m really afraid of a progressive loss of the role of the dollar,” he told Bloomberg TV in October, adding that “people nominally conduct transactions in dollars, but they don’t store it in dollars, and that is what the problem is.”