How will Trump Impact Europe in his New Term?

The election of Donald Trump as the President of the United States of America (US) for the second time poses manifold challenges to the continent of Europe, which is already going through a major war, sluggish economic recovery after the pandemic and a myriad of issues from migration, to rise of the Far-Right. Europe has bitter memories of the first term of Trump, where he threatened to recalibrate NATO, which is a central tenet of the Atlantic partnership between Europe and the US. Along with it, the mandarins of the European Union (EU) struggled to keep up with Trump’s unpredictability in areas related to trade and tariffs. Europe itself is suffering from a populist wave, where many countries of the EU have elected populist, Eurosceptic leaders questioning the very foundations of the post-1945 liberal international order made by the victors of World War II.

Trump’s victory represents a different kind of political landscape, which is propelled by ideas that have been denounced consistently by majority of the Europeans, namely nationalism, populism, and anti-liberal rhetoric. While the EU prides itself in being a progressive post-modern supra-national union based on institutional checks and balances, the 27-member grouping has been beneficial for the old and new members alike. Many futuristic legislations passed by the EU, such as the EU Privacy law, its environmental laws, and AI laws, represent a very different kind of politics—certainly different from what Trump seems to promote. Having said this, the impact of Trump’s presidency in Europe is going to be great. In this article, we will try to look into the key areas that are likely to be impacted the most during Trump’s second presidency.

European Foreign and Security Policy and Ukraine War

The foreign policy and security architecture of Europe are closely connected with those of the US, thanks to NATO, which is celebrating its 75^th anniversary this year. Articles 2 and 5 of the North Atlantic Treaty are central to this alliance, which say the attack on one will be considered an attack against all. It helped the US and Western European powers to win the Cold War against the former USSR. Since then, much has changed in the European security architecture; NATO was a 12-member group when the USSR collapsed. The world witnessed a unipolar moment for some time. For liberal analysts, it was a moment of triumph for the liberal world order in history, which Fukuyama famously claimed as ‘the end of history’. Nevertheless, it was far from the end of history; however, the confidence gained from the end of Cold War prompted the US and its allies to expand NATO, which now has 32 member states directly bordering Russia.

The 2022 Russian attack on Ukraine is closely related to the expansion of NATO and the EU in the backyard of Russia, while liberals from both sides of the Atlantic see the invasion as a war between democracy and autocracy. It is also a war which will redefine Russia’s place in the European security architecture. Trump’s out-of-the-box approach may help Europe come out of this war; however, this may not be as easy and simple as he claimed while running for presidency that he would end the war in ‘a day’ after becoming president. Trump seems to enjoy some amount of goodwill of the Russian President, Vladimir Putin, who offered him warm congratulations after getting elected. Putin as well as the Ukrainian president Volodymyr Zelenskyy would hope for a ‘faster’ end to the Ukraine war under Trump.

Many contentious issues may arise  once Trump sets out to deal with the Ukraine problem. First and foremost, the solution must be accepted in the power centres of Europe. It should not also be felt by the smaller European states that their security does not matter. In his first term, Trump had sent chills over Brussels when he asked European countries to increase defence spending and contribute their shares of NATO. Many states have already started doing the same, including Poland and Germany. Any erratic decision on the part of NATO now, in response to possible colder response from Trump, could further complicate the alliance.

On Trade and Tariffs

Trump regularly lambasted the US-EU trade imbalance during his first term, slapping European steel and aluminium with Section 232 tariffs on the grounds of US national security. He even went as far as threatening tariffs on European automobiles― a key export sector for countries like Germany. His second term could see a revival of many of those tariffs, especially if he feels Europe is at an unfair advantage in trade. The Trump administration might increase domestic manufacturing and push for reducing trade deficits at the expense of Europe's economy, giving them unfavourable terms of trade, such as reducing subsidies to European industries competing with the American ones via agricultural technology and green technologies.

The European auto industry, especially in Germany, has remained one of the primary targets for Trump's trade ambitions. Autos form a large chunk of the overall EU trade surplus with the US, making them integral to any possible renegotiation. Though European manufacturers have diversified production bases, including in the US, additional tariffs would stretch supply chains and add costs with global repercussions.

Nevertheless, Europe is not out of options as it is more than ready to deal with Trump on the trade and tariff issues. The EU's most significant strength in the face of the US is its aggregated economic might. The EU is the world's largest trading bloc, and presenting a united face can have a critical impact on negotiations. This requires an alignment of interest within the member states, as various economic priorities complicate this alignment. Germany's export-heavy economy has different sensitivities than France's agricultural sector or Italy's luxury goods industry. Nevertheless, while reciprocal tariffs are the traditional weapons in trade disputes, the effectiveness of such measures will be constrained because Europe's relatively greater dependence on the US markets for certain goods limits its options. Even then, retaliation may be considered essential to ensure credibility but will most likely be targeted and strategic, seeking to deliver maximum political pressure on the US. Other than taking disputes to multilateral channels, the EU also has the option of taking a common stand against Trump. The American president-elect has been keen on cutting individual deals with the European states, circumventing the EU as a trade bloc.

On Progressive Policies of the EU

Trump presidency could also have implications for the progressive legislation and policies accomplished under the EU. Many of these legislations deal with climate action, rules on digital regulations, human rights, labour standards, and data protection; all domains where, during his first term, the policies and rhetoric of the Trump presidency seemed to be politically at odds with the priorities of the EU.

Trump’s scepticism toward climate science and preference for fossil fuels might embolden other countries to deprioritise their commitments, creating a domino effect that complicates the EU’s diplomatic efforts in forums like COP negotiations. The EU’s Carbon Border Adjustment Mechanism (CBAM) imposes tariffs on imports with a carbon footprint that will likely be viewed by Donald Trump as an outright attack on US exports. Again, this would risk retaliatory trade measures and add another layer of complexity to EU climate goals and trade relations.

The EU has been at the forefront of legislation targeting Big Tech, notably by laws like the General Data Protection Regulation (GDPR) and the Digital Services Act (DSA). Trump's administration did not demonstrate much respect for these regulations since they considered them barriers to US technology companies. Several EU countries have introduced or planned digital taxes targeting US-based tech firms. Trump has retaliated against such efforts in the past by threatening tariffs. The reopening of this conflict domain might escalate into an all-out economic battle. Trump’s involvement in this issue can be understood by the fact that he took cognisance when an EU court ordered Apple to pay fines to Ireland.

On Populism

It is essential to note that the wave of populism that got Trump elected in his first term has also erupted in Europe. Today, renowned populist leaders of Europe include Hungarian Prime Minister Viktor Orban, French leader Marine Le Pen, Italian Prime Minister Georgia Meloni and many others. Many of these leaders followed similar trajectories to get to power. It involved creating a dichotomy between ‘pure’ people and ‘corrupt’ elites and representing themselves as the true representative of people, questioning the ethos of liberal democracy, its institutions and decisions made by it. Populists in Europe have fuelled Euroscepticism and castigated the progressive policies made by the EU. The election of Trump in 2016 had marked a historic win for their rhetoric.

Be that as it may, Trump’s second term might not be as exciting for the European populists as nationalism forms the core of their political rhetoric. Trump’s America First and trade-related regulations might hurt the populists in Europe and disturb their core nationalist voters.

Republicans have also made a tough remark on Hungary’s growing relationship with China. US Republican Mitch McConnell put it thus: “when Chinese state enterprise says jump, Hungarian officials ask how high”. Nonetheless, Trump’s election will usher in a new era of European politics where populist concerns will be more mainstreamed, and its effects and after-effects will play their role in deciding the collective future of Europe.

On European Strategic Autonomy

Strategic autonomy, a concept increasingly emphasised by the EU, is the ability of Europe to act autonomously in key areas such as defence, technology, energy, and economic policy. Against the background of the idea of rapprochement with reduced reliance on external powers, particularly the US, strategic autonomy is designed to strengthen the EU's potential for defending its interests and values on the world stage. The proponent of the EU, especially the Franco-German alliance, has long sought European strategic autonomy. It wanted the US to play a constructive role in making the concept a reality. Nevertheless, Euroscepticism, Populism and, finally, the election of Trump hampered the process. French President Emmanuel Macron has been its keen proponent and called for Europe to function as a "third pole" in an increasingly multipolar world, set apart from the U.S. and China. That is why initiatives such as the European Defence Fund, the Green Deal, and the European Digital Strategy are fundamental to this vision.

The coming of Trump to the centre of the Transatlantic canvas and his tough stances on Europe may accelerate the demand for strategic autonomy in Europe. Nevertheless, European actors have competing visions for Europe, which will undoubtedly impact this debate.

Conclusion

From 2016 to 2020, the tenure of Donald Trump, as the 45^th President of the US, had been disruptive for friends and enemies alike, at least in terms of rhetoric. While writing for the Council on Foreign Relations, Robert Blackwell wrote: “Trump’s Policies Are Better Than They Seem”. The report points to a gap between his rhetoric and actual policy implementation. Blackwell wrote that even if Trump’s comment on the problems with NATO helped the security alliance to get more budget from the member countries, the US also played its part, reinstating the US Navy fleet in European waters and providing essential support for European security. Nonetheless, in a world where rhetoric has an essential role to play in setting the narratives and conducts of actors, Donald Trump’s new term is creating panic and anxiety amongst the Europeans as to how to manage the challenges posed by him. Despite the challenges, the Europeans are currently better placed to face the ‘anything goes’ attitude coming from Washington. 

*Harsh Pandey is a Ph.D. Candidate at the Centre for European Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. The views expressed here are his own.