Trump’s Second Term: Impacts on Europe and Strategies for EU Defense and Trade

Trump’s Second Term: Impacts on Europe and Strategies for EU Defense and Trade

In a historic and unprecedented political resurgence, Donald Trump is poised to take office once again as the 47th president of the United States, marking an extraordinary feat as he becomes the first leader in over 120 years to secure a second non-consecutive term. Notably, he stands out as the first former president to have faced felony convictions and impeachment proceedings, yet emerge victorious at the ballot box.

As Europe braces for Trump’s return, EU nations must prepare for a potential rough ride ahead. During his previous administration, Trump had strained relations with European allies, often adopting a disparaging tone. The silver lining, however, is that EU leaders are now acutely aware of his likely agenda, providing them with a strategic advantage.

Trump has assertively declared his intention to bring a swift end to the war in Ukraine within just 24 hours of taking office and has expressed his intent to obstruct Ukraine’s aspirations to join NATO. On the economic front, he plans to impose substantial tariffs—10% to 20% on all European imports and an eye-watering 60% on imports from China. Additionally, he aims to exit the 2015 Paris Agreement on Climate Change for a second time, further complicating global environmental efforts.

The implications of Trump’s presidency extend beyond the political realm; it is expected to bolster far-right movements across Europe, as they resonate with his views on immigration and national identity. This shift could lead to increased instability in the existing global framework, jeopardizing multilateral cooperation, transatlantic relations, and the unity of Europe itself.

Security and NATO under threat

Given the imminent threat of Trump potentially withdrawing support from Ukraine and challenging NATO’s relevance, European nations are urged to bolster their defense strategies and allocate a minimum of 2% of their GDP to military expenditures. This strategic shift is essential for two key reasons: it is imperative for EU members to recognize the necessity of mutual defense arrangements and would serve to reassure Trump, who has long criticized NATO allies for their defense spending.

This reallocation of resources must also foster collaboration among EU members with robust military-industrial complexes, such as France, Italy, Spain, and Poland, to stimulate innovation, economic growth, and overall market viability in Europe.

The backdrop of such challenges is evident, as the EU makes tentative yet hopeful strides toward greater independence in armaments supply. The recent Draghi report, released in September, advocates for a focus on developing domestic arms industries rather than relying predominantly on U.S. imports. Currently, approximately 63% of Europe’s arms are sourced from the United States.

Furthermore, EU countries might explore the option of collective debt financing as a means to synchronize defense expenditures and facilitate arms procurement. The European Investment Bank could play a pivotal role by providing loans to member states for defense enhancements. By opting for joint borrowing through the issuance of “eurobonds,” the EU could also augment its financial support to Ukraine, particularly crucial if Trump reneges on commitments.

Trade and tariffs

Trump’s protectionist stance has been evident throughout his political discourse. During a recent rally, he declared that outside of love and religion, “tariff” stands as one of the most beautiful words in the English language. Such sentiments significantly alarm EU leaders, who fear these tariffs could trigger a drastic decline in exports to the United States, ultimately threatening millions of jobs in the EU.

The U.S.-EU trade relationship remains the largest globally, valued at $1.3 trillion. In contrast, trade between the EU and China lags behind at $758 billion. Notably, machinery, vehicles, and chemicals constituted approximately 68% of EU exports to the U.S. in 2023, making them particularly vulnerable to incoming tariffs. Countries such as Germany, the Netherlands, Ireland, and Belgium may feel the brunt of any trade downturn.

To insulate itself from potential tariff hikes, the EU should pivot towards other regional markets, including finalizing the Mercosur agreement and pursuing new alliances to mitigate over-reliance on the U.S. market. Additionally, prior to any retaliatory tariff measures, the EU should prioritize negotiations. During Trump’s first presidency, for example, Ursula Von der Leyen personally engaged with Trump in hopes of securing mutually beneficial trade terms.

Given Trump’s unpredictable nature, these diplomatic negotiations may become crucial for securing trade arrangements, including exemptions for specific exported goods.

Democracy and the undermining of European values

Trump’s election victory is anticipated to invigorate far-right factions across the EU, which echo his nationalist sentiments regarding immigration and national identity. Notably, Viktor Orbán of Hungary has expressed his intention to celebrate a second Trump presidency with gusto, signaling solidarity with his political ideology.

Far-right parties in the EU, including Alternative for Germany (AfD), the Freedom Party of the Netherlands, France’s National Rally (RN), and Italy’s Brothers of Italy, view Trump as a figurehead of their movement. This newfound empowerment may lead to an increase in anti-democratic rhetoric and actions across Europe, putting foundational democratic values at substantial risk.

This burgeoning influence could exacerbate social tensions within member countries. To counter these forces, the EU must adopt a resolute stance, establishing sanctions or even expulsion measures for member nations that stray from the core principles of democracy and human rights.

Restricting their influence could also involve reforming voting procedures within EU institutions. With many current decisions necessitating unanimous agreement among all 27 members, nations like Hungary can wield disproportionate influence to obstruct critical initiatives. Orbán has previously blocked military and financial assistance to Ukraine, exemplifying this challenge.

By transitioning to a majority vote system instead of a unanimous one, the EU can minimize the power vested in its most extreme members, ensuring that democratic processes remain intact.

While such interventions may not completely extinguish the appeal of illiberalism in Europe, they could prevent severe disruptions to the continent’s democratic institutions.

Can we Trump-proof Europe?

Implementing the aforementioned measures necessitates enhanced unity and cooperation among European nations. Historically, moments of crisis have galvanized collective responses within the EU. The Eurozone crisis led to the creation of integrated banking frameworks, the COVID-19 pandemic brought about collective vaccine procurement strategies, and the conflict in Ukraine incited a united front in support of Kyiv.

It is hoped that a second Trump presidency could similarly catalyze joint actions, fortify collaboration, and promote strategic autonomy, as the immediate future of the European Union hinges on these developments.

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