While the deal takes some of the panic out of negotiations, it doesn’t address the steady drift between the U.S. and the partners it once regarded as allies.

That’s according to Macquarie global strategists Thierry Wizman and Gareth Berry. In a note sent to clients shared with Fortune, the duo wrote there is a “mutual alienation” between America and its European counterparts. “It’s in that spirit that we can still talk about a fracturing, more dangerous, world, in which the U.S. is less vaunted, the USD loses its reserve currency status, and where the U.S. focuses instead on the Western Hemisphere as its sole and defendable redoubt,” the pair explained.

Friction between the U.S. and Europe—be it the EU or the U.K.—has increasingly been chafing as the second Trump administration charts its course. Issues have included Europe’s contributions to NATO and Trump’s tariff regime.

“Even in the Greenland deal supposedly reached yesterday, there are elements of mutual distrust,” write Wizman and Berry. “For example, a deal to cede part of Greenland to the U.S. may have only been struck alongside the quid pro quo that if the U.S. would continue to (very reluctantly) support Europe’s view that Ukraine should stay wholly ‘in Europe’—i.e., outside of Russia’s control.”

This European demand therefore potentially puts the U.S. at odds with Putin, hence the incentive for America to bolster its defenses against Russia by acquiring Greenland. Meanwhile, Europe has maintained a friendly approach to American rival China, with French President Emmanuel Macron saying its investment is “welcome.”

“This perceived threat to the U.S., invited in by Europe’s demands and actions, motivates the U.S.’s antagonistic attitude (and military threats) toward Europe, especially in regard to the ‘need’ for Greenland, and the U.S.’s desire for Europe to ‘man up,’ civilizationally,” the note said.

Threat to the dollar

Interestingly, the suggestion that Europe may react to America’s actions by distancing their investment from U.S. assets seems to have got under the collar of the Trump administration the most. Treasury Secretary Scott Bessent addressed (and dismissed) claims that European buyers of U.S. debt may exit their positions in the bond market, but some evidence of that could be seen in the increase in yields this week. The selloff faded later, as relations normalized across both sides of the Atlantic.

This is the “Achilles’ heel” of America, Deutsche Bank said this week: The country is running a sizable annual budget deficit and thus has a growing national debt. It needs that debt funded by foreign countries. And that prompts a question about America’s long-term economic firepower.

Broadly, the Trump 2.0 administration’s actions have contributed to the view that the U.S. is an increasingly erratic partner, Macquarie wrote in a Global Outlook memo back in December. A “watershed” moment came with the Liberation Day tariffs, which sent investors hunting for assets outside the White House’s sphere of influence and, as a result, away from the U.S. dollar.

The episode will cast a “long shadow” over trust in the USD as a result, the team wrote last year, and the weaponization of America’s economic prowess “injected greater urgency into the search for alternative currencies as a store of value or with which to transact.”

Trump’s most recent U-turn will do nothing to undo fears that America isn’t the financial safe haven it once was. As the Macquarie strategists wrote in their latest note, the current state of play is “not a good place to be if you want to preserve the USD’s reserve-currency status. That status was built on the premise of U.S. leadership and protection, in return for a modicum of subservience (and financing) from the U.S.’s allies and others that joined the U.S.-led rules-based order.

“Without that understanding, diversification away from the USD will ultimately take hold, even if it starts out by being a diversification into gold instead.”