At a meeting of European leaders days after Donald Trump’s reelection last November, French President Emmanuel Macron admonished the continent to toughen up in the face of a more Hobbesian international environment: “We tend to think we should delegate our geopolitics to the United States, our growth model to our Chinese clients, and our technological innovation to American hyperscalers. For me, it’s simple. The world is made up of herbivores and carnivores. If we decide to remain herbivores, then the carnivores will win, and we will be a market for them.”
The moment made for compelling TV, but it also underscored the complications that will bedevil Europe as it confronts a more assertive United States under Trump. Macron is just one voice of a divided continent; he is also in a profoundly weakened position at home, given a populist surge that has roiled European politics. And his comments pointed to Europe’s own economic drift and sluggish growth, exacerbated by the energy shock caused by Russia’s invasion of Ukraine and an ongoing slowdown in China, the European Union’s third-largest export market after the United States and United Kingdom. It all makes striking a more independent European path quite a tall order.
The fate of Europe represents perhaps the most intriguing geopolitical story to watch over the course of Trump’s second term. That’s because the stakes are so high: Europe’s choices in response to Trump’s transactionalism may set the long-run trajectory for both Europe’s own potential and the health of the trans-Atlantic alliance, the cornerstone of the geopolitical West.
Washington will inevitably shake these foundations over the next four years. Expect threats of steep tariffs, a strategy of dividing the continent by picking favorites, and a questioning of the U.S. commitment not only to Ukraine but to Europe’s security as a whole. And that’s not to mention all of the other irritants in store: from supportive comments by Trump and his allies toward the European far right (take Elon Musk’s boosting of the ultra-right Alternative for Germany as a harbinger) to deprioritizing climate change.
Europe will not sit idly by. Brussels is prepared both to placate and negotiate—and eventually retaliate hard should things turn for the worst. Depending on how much the White House cranks up the pressure, Europe is likely to embark on one of three overall paths in response to a more carnivorous Washington: conciliation and closer alignment with the United States; division and paralysis; or strategic autonomy and a push to bolster its own competitiveness, geopolitical and military toolkit, and independence.
The first path might seem optimal from Washington’s vantage and may prove the least economically disruptive if in the near run Europe successfully keeps its head below the parapet and dodges Trump tariffs. (Analysts estimate a 10 percent U.S. tariff could cost up to 1 percent of EU GDP growth.) But in the long run, greater strategic autonomy may be the best outcome for Europe, the United States, and the world. A more prosperous and competent Europe, even if more assertive of its own priorities, would strengthen the West, given the fundamental convergence of interests and bonds across the Atlantic.
A Bradley Fighting Vehicle of the U.S. Army and a Leopard 2PL main battle tank of the Polish armed forces descend from rigs after crossing the Vistula River during a NATO military exercise near Gniew, Poland, on March 4, 2024.Sean Gallup/Getty Images
During Trump’s first term, many in Europe viewed him as a temporary aberration, and the continent emerged rattled but generally unscathed. The EU successfully headed off Washington’s most damaging tariffs, including plans for U.S. duties on the all-important auto sector, and while Trump made a lot of noise about pulling out of NATO, he ultimately stayed put and even got NATO countries to increase defense spending by 0.27 percent of GDP on average among member states by the end of his first term.
But there’s strong reason to believe that Trump 2.0 will be different. He has appointed more loyalists and has an even more ambitious America First agenda. Start with trade: His promises of a 10 percent universal tariff and 60 percent tariff on China are of a next-level magnitude than Trump 1.0; during Trump’s first term, Washington ended up raising the average U.S. effective tariff rate from 1.5 percent to only around 3 percent. The United States has its second-largest bilateral trade deficit—after China—with the EU at more than $200 billion, which puts the continent immediately in Trump’s crosshairs as his trade policy gets underway. The president has also pointed to a lack of trade reciprocity with Europe, such as in autos, where the EU tariff on U.S. imports is 10 percent while the U.S. tariff is 2.5 percent. In a recent interview, he called Europe a “double whammy”: ripping off the United States on trade while relying on it for defense. And just this week, Trump complained about the size of the U.S. trade deficit with the EU and referred to Europe as “very, very bad to us” on trade.
There are low-hanging fruit where Washington might take early action: reinstate steel and aluminum tariffs on Europe that were paused by former President Joe Biden, as well as Trump’s 2019 tariffs on $7.5 billion in European consumer goods as part of the arcane Boeing-Airbus dispute. Trump is more likely this time around to announce duties on European autos. And he has already threatened tariffs if Europe doesn’t buy more U.S. liquefied natural gas and oil. Almost immediately upon resuming office Trump signed an “America First Trade Policy” executive order that initiated a sweeping set of investigations across global trading partners due by April 1, signaling that essentially nothing is off the table.
Essay
Trump’s Return Would Transform Europe
Without Washington’s embrace, the continent could revert to an anarchic and illiberal past.
By Hal Brands
On defense, the White House will make the same demand as last time: Europe needs to cough up more. Trump is pushing for a spending target of 5 percent of GDP, rather than the previous 2 percent target (which more than 70 percent of NATO countries have now met). But under Trump 2.0, there is a new, more potent twist: his demand that Europe take on more of the burden for Ukraine, particularly military aid. On China, the White House will pressure Europe to up its game on restricting trade, technology, and investment flows with Beijing.
How will Europe respond? It’s clear that there are some initial measures, and principles, in the works. Europe will want to stay unified and negotiate at the EU level. If Washington institutes tariffs on strategic industries such as autos, expect a rapid counterpunch of duties on politically sensitive U.S. goods. But the EU is also prepared to offer some carrots on defense, energy, and trade.
Europe is also in a much different place than it was in 2016. Europe’s default industrial strategy of using cheap Russian gas and exporting to China has broken down. And, as covered in painful detail in last September’s EU competitiveness report from former European Central Bank President Mario Draghi, inadequate private and public investment, a lack of market and financial integration, and burdensome regulation have sapped productivity growth and ceded competitive advantages to the United States and China, which have been racing ahead over the past eight years. The United States’ $28 trillion GDP is now $9 trillion bigger than the EU’s, up from near parity with Europe in 2011.
Much will depend on Trump’s initial moves. But, in general, Europe’s reaction will likely tilt in one of three directions, with far-reaching consequences for the geopolitical environment.
New VW electric microbus cars are seen parked before delivery at the commercial vehicle plant of German car manufacturer Volkswagen in Hanover, Germany, on Dec. 20, 2024. Ronny Hartmann/AFP via Getty Images
A negotiated solution is sure to be one of the EU’s opening gambits. The European Commission’s “Trump task force” is already preparing a conciliation package that is likely to include greater China alignment, for example on export controls and investment restrictions, more purchases of U.S. LNG, and perhaps concessions on the steel and aluminum tariff dispute and carveouts of U.S. imports from Europe’s upcoming Carbon Border Adjustment Mechanism. Pledges to increase defense spending, including on weapons for Ukraine, are likely. Most NATO members already think defense spending of at least 3 percent of GDP is necessary.
In this accommodation scenario, Trump is assuaged, his attention is focused elsewhere, and while Europe may see targeted tariffs, broader and more economically disruptive duties are kept at bay. A workable relationship on aid to Ukraine is also maintained. The United States would remain, albeit reluctantly, a part of European security architecture. If Washington goes after China on trade instead, the EU may even experience trade diversion benefits as European exports become more attractive to U.S. consumers.
Argument
Europe’s Biggest Problem Is Pessimism
The headwinds are surmountable, but the continent is giving up on the idea of progress.
By Caroline de Gruyter
The catch is that accommodating Trump will be impossible without closer ideological convergence. EU priorities on climate and technology—including enforcement of the Digital Services Act and Digital Markets Act against U.S. Big Tech companies and social media platforms such as Elon Musk’s X—would need to take a back seat to avoid irritants. Trump’s ideological preferences will push right-wing leaders into the spotlight. The EU’s key interlocutors in this scenario—from Italy’s Giorgia Meloni and Poland’s Andrzej Duda to Hungary’s Viktor Orban—will lend the union a distinctly Trumpian flavor.
The result would be a European continent more closely bound to the United States politically, economically, and ideologically. In other words, a Europe forged in Trump’s image. EU growth would muddle along in the 1-2 percent range as Washington stops short of accelerating economic headwinds with the most damaging tariffs but structural reforms to improve Europe’s market integration and competitiveness are deferred. A strong trans-Atlantic alliance, albeit a changed one.
U.S. Rep. Kat Cammack and Italian Prime Minister Giorgia Meloni take a selfie at the inauguration of Trump in the rotunda of the U.S. Capitol in Washington on Jan. 20.Kevin Dietsch/Getty Images
An alternative scenario of European division and paralysis would see strong pushback in some quarters to Washington’s bullying and an assertion of Europe’s economic, technology, and trade priorities by the commission and influential member states such as France and Germany, alongside deference and even ideological alignment from other countries. Amid a cacophony of competing voices, EU member states would look inward and focus on protecting their own interests, peeling off from joint EU approaches and reverting instead to bilateral dealings with the United States. Duda, Meloni, and Orban would enjoy stronger channels of communication to Washington—and may even get carveouts from trade actions. Reports of Italy’s $1.6 billion negotiation with Musk’s SpaceX as Meloni appeared at Trump’s Mar-a-Lago resort are unlikely to be the last of their kind.
Trump himself will be in his element. Washington will prefer to deal bilaterally with EU members states to maximize leverage. The net result would be paralysis at the EU level, as emboldened right-wing leaders and internal squabbling repeatedly thwart unified EU action, including on competitiveness reforms, aid to Ukraine, and Russia sanctions.
Russian President Vladimir Putin would benefit from this fragmenting. Western disunity has long been a strategic objective, and he may even test the extent of U.S. indifference to Europe through bolder active measures in Europe or adventurism in the Balkans and Baltics. Beijing would also benefit, as it seeks out bilateral economic deals with friendly member states and as EU action on anti-dumping measures and reducing dependencies on China falls by the wayside. Strategically adrift, Europe will become a less consequential global player, and countries targeted by Trump’s tariffs will face further economic struggles.
European Commission President Ursula von der Leyen speaks to the European Parliament in Strasbourg, France, on July 18, 2024.Johannes Simon/Getty Images
The final option is that Europe, pushed into a corner, undertakes strategic autonomy shock therapy. That Europe is “made in crisis” is an oft-repeated trope, but it holds historical weight. It held true during the COVID-19 pandemic, Brexit, and Russia’s invasion of Ukraine. And it could hold true again. European Commission President Ursula von der Leyen, in particular, has repeatedly demonstrated the creativity, and opportunism, to leverage crisis-driven consensus to move European integration forward.
An empowered commission would have the political momentum to execute reforms that adapt the EU’s economic model for the 21st century. The commission could reform rules to promote European champions that compete with U.S. and Chinese giants and allow a regulatory pause to stem the flow of European unicorns relocating abroad. Tighter financial market integration through harmonizing regulation and supervision would improve access to capital for European firms by mobilizing savings and investment, including Europe’s $35 trillion in household savings. Von der Leyen has begun this process already, announcing during an address at Davos this week that the EU will establish a European Savings and Investment Union to better mobilize capital for European businesses, She also launched the creation of a unified set of corporate rules, named the “28th regime,” for companies to opt into, rather than adapting to 27 different national frameworks.
Defense would be a cornerstone of strategic autonomy. Setting up a centralized procurement agency within the European Defence Agency and establishing a “Buy European” principle for defense platforms would initiate the process of better integration of the EU’s security. Joint borrowing could help catalyze the more than $880 billion in annual public and private investment recommended by Draghi in areas such as defense and technology. And the EU could build out an upgraded economic security toolkit of joint export control and investment screening authorities.
Analysis
Europe Alone
Nine thinkers on the continent’s future without America’s embrace.
By Mark Leonard, Constanze Stelzenmüller, Nathalie Tocci, Carl Bildt, Robin Niblett, Radoslaw Sikorski, Guntram Wolff, Bilahari Kausikan, Ivan Krastev, Stefan Theil
The Franco-German engine may soon come roaring back to life, too. Trump’s election has given credence to many of Macron’s arguments for strategic autonomy, and Christian Democratic Union leader Friedrich Merz—the favorite in Germany’s February elections—strongly disavows his predecessor Angela Merkel’s approach to Russia and plans to be a force in his own right. New leadership in Berlin may also change much-debated debt brake provisions, creating fiscal flexibility to increase spending on defense, decarbonization, and advanced technology.
On China, the EU may take its own strategic path. The EU could, as previewed in the Draghi report, leverage an upgraded economic statecraft toolkit to prevent Chinese dumping and reduce dependencies in technology and pharmaceuticals while prioritizing green objectives such as solar panels, continuing to buy cheaper Chinese goods, and allowing investment opportunities that create jobs in Europe.
It is worth noting that this scenario is also a risky one. A more united and assertive Europe is more likely to cross swords with Trump, potentially leading to higher duties in the near term that would sap growth. Washington’s tariff wall against China would simultaneously exacerbate these challenges by producing a flood of cheap Chinese goods into European markets. And any questioning of U.S. military support before the Europeans have a chance to build up their own defense capabilities could leave Europe vulnerable while emboldening Moscow.
But while disruptive in the short term, Europe’s opportunity to strike out on its own would be a bet on a stronger economic and security foundation in the long term. Arguably, one that benefits the United States, no matter who is in the White House, given long-standing structural alignment between both sides of the Atlantic.
None of these paths are predetermined, and they are, to a degree, simplified. In the months ahead, we will see all three versions of Europe’s future competing and sometimes happening simultaneously. However, over time, one will likely win out. At a moment of economic vulnerability and brewing populist dissatisfaction, the choices Europe makes now will be critical: Four more years of political and economic drift may lead the continent into geopolitical irrelevance.
At stake, first and foremost, is Europe’s own prosperity and potential. With further economic reform, market integration, and investment, Europe has the potential to bend its anemic growth and productivity trajectory upward. With meaningful defense integration and a more capable economic statecraft toolkit, the EU has real potential to be a major geopolitical actor.
Also at stake is the vigor of the trans-Atlantic alliance, which is essential in a more contested and fractured world. Military and political alignment between the United States and Europe is mission critical to thwarting a revanchist Russia. Acting together rather than in parallel, Washington and Brussels have much more heft to address climate change and shore up economic vulnerabilities. Trans-Atlantic coordination also amplifies Western economic statecraft—whether in sanctions, export controls, or industrial policy—and is therefore potentially decisive in competition with China for the commanding heights of the 21st-century economy. In material terms: The United States (27 percent) and EU (17 percent) combined represent about 45 percent of global GDP, while China represents about 15 percent. But on their own, they are on more equal footing.
Counterintuitively, a stronger but more independent Europe may be the best way to fortify this alliance. Washington can’t have it both ways: A more capable Europe will inevitably assert its own priorities, while a more deferential one is likely to be less capable at home and on the world stage. Fundamental convergence of interests in addressing Russian aggression, Chinese competition, and global challenges will hold together the Western bloc, which will benefit in the long run from a willful and prosperous partner in Europe. And as former U.S. Secretary of State Dean Acheson once put it, “Without developing a common will, Europe will warrant Napoleon’s description of Italy, a geographical expression.”
This post is part of FP’s ongoing coverage of the Trump administration. Follow along here.