Here we go again: the Trump rollercoaster returns to Washington - and Brussels too

All foreign policy begins at home. So before we begin to analyse the impact of a Trump 2.0 presidency on Europe and global affairs, we have to start with an overview of what Trump’s decisive re-election tells us about a changing United States and how Americans now see their relationship with the wider world.

67 million Americans voted for Trump, just over 50% of the electorate, but enough to give Republicans a majority of the popular vote for the first time in over 30 years. So Trump’s victory cannot be blamed on the distortions of the 18th century Electoral College system as when he won against Hillary Clinton, despite being three million votes behind her in the 2016 contest. Whether we like it or not, most Americans approve of Trump as a leader and voted for his policies despite experiencing his performance in the White House and the chaotic style of government in his recent first term. Of course, these Trump voters are a mixture of those who like the man’s leadership style but don’t take his radical policies too seriously (for instance on the mass deportation of illegal migrants or swingeing tariffs on all the U.S.’ major trading partners); and those voters who do not like Trump’s character and disapprove of his past business and personal shenanigans and criminal record, but who nonetheless believe that he will reduce crime, curb inflation and improve the American economy in their favour. The common denominator of both camps is that they found Kamala Harris and the Democratic offer even less palatable. Before the election, nearly two-thirds of Americans consistently told pollsters that they believed the country was on the wrong track and that they wanted the money that the US spends on maintaining peace and the Liberal Order abroad to be spent on them first and foremost at home. At the same time, the U.S. election is part of a global trend of anger against incumbent governments. It was the 10th time in the past 13 U.S. elections that the cry of “turn those bums in Washington out” had prevailed. During the 70 elections around the world this year, in almost no cases has an incumbent government been re-elected even when, as in the case of an administration like Joe Biden’s, it has done a worthy job of avoiding new wars, creating millions of jobs, modernising the economy with alternative energy and green technologies, ensuring recovery from the Covid pandemic and bringing inflation under control. The perception that voters have of their immediate financial and economic situation is what matters. In the 45 months of Trump’s first term, inflation rose by 7%; during Biden’s term it reached 20%. That statistic probably alone explains the Democrats’ defeat. But anger against the incumbent (as seen also in elections in the UK, Japan, France, the Netherlands, Belgium and most probably Germany too in the near future) ushers in a new trend of one-term governments. They will spend much of their time undoing what their predecessors have done, will rush into radical policy shifts without proper consultation and preparation, and will not be around long enough to implement serious political, economic or social reforms. Democracies will become permanent electoral campaigns as political parties adjust to expressing and channelling a permanent wave of popular discontent and anger.

Certainly U.S. voters were in a gloomy, as well as an angry, mood and motivated more by perceptions than actual realities. According to Bruce Stokes, a pollster at the U.S. German Marshall Fund, eight in ten voters believed that inflation was rising, whereas it is today 2.4% down from 9.2% two years ago. Half of Trump’s voters believe that illegal immigration is rising, whereas it was down 58% over the past year. And around half of those voters also believed outright lies about Haitian migrants eating dogs and cats, or that abortion could be practiced on newborn babies. Nearly 30% believed that U.S. high schools and colleges were actively encouraging or even financing gender affirming surgery. The traditional U.S. media tried hard to debunk these myths, including through a fact-checking operation, during and after the Trump-Harris presidential debate; but they enjoyed a long life on social media where many Trump supporters form their view of the world. Those supporters also have a firm view of what they want and expect Trump to do. For instance they want more U.S. unilateralism. Only four in ten support compromises with allies. Republicans are three times more likely than Democrats to support decreasing U.S. commitments to NATO or withdrawal from NATO altogether. They are two to one in favour of the U.S. seeking a negotiated end to the war in Ukraine, even if it means significant territorial concessions by Kyiv to Moscow. Over 50% want a halt in further U.S. aid to Ukraine, and Republicans have become increasingly sceptical of President Zelensky, believing that he is standing in the way of a “realistic peace”. Support for Israel to do whatever is necessary for its security has increased and condemnation for Israel’s actions in Gaza and Lebanon with their high humanitarian costs has waned. There is a widespread conviction that trade is bad for America’s prosperity, destroying jobs and lowering wages. Republicans have a very negative view of China  which now has its most negative ranking since the events in Tiananmen Square in 1989. Two-thirds support major tariffs on China and four in ten support tariffs on Mexico too, though it is currently America’s largest trading partner. There is also overwhelming support among Trump voters for the deportation of 11 million illegal migrants. Moreover, and in the week that the COP29 Climate Change Conference is getting underway in Baku, Republican voters show less concern about the effects of climate change and are not demanding strong government action, even though 2024 will be the hottest year on record and millions of Americans are experiencing firsthand the impact in terms of extreme heat, forest fires, smoke pollution, hurricanes, flooding and infrastructure collapse. Taken altogether, the U.S. election reveals an electorate that wants change, but backwards rather than forwards- back to an earlier isolationist America where the pace of social, economic and technological change was slower, where white males and traditional family values were in the ascendancy and the country could protect itself from outside competition and the forces of globalisation behind the Smoot Hawley tariff and the Neutrality Act. At the very minimum, voters seem far more concerned with immediate pocket book issues than the quality of U.S. democracy or issues and challenges beyond America’s shores. There is a willingness to believe in the cult of the strongman playing fast and loose with the rules if he is able to deliver that change.

It is the mood of the voters as much as the Republican successes in regaining the Senate and the House of Representatives, as well as controlling the Supreme Court with their ideological allies, which now gives Trump his almost limitless mandate; and arguably more untrammelled power than any previous U.S. President. In 2016, Trump was not expecting to be elected President. He had no experience of governing and made little preparation for exercising power. His policy platform consisted of slogans with few concrete plans. He had little idea of who he could appoint to his Cabinet positions and often fell back on those who had the experience and the know how: the more traditional, internationalist Republicans who soon disagreed with him and held up the implementation of his more radical plans. Indeed, the chaos of his first administration sometimes helped the liberal cause; for instance, when Trump announced a ban on Muslims entering the U.S. at the urging of his advisor, Stephen Miller, but without informing his Secretary of Homeland Security. As a result, no plans had been made to implement the travel ban which affected Muslims in the air as they were on their way to the U.S. Chaos caused the Executive Order instituting the ban to be withdrawn. But this time round, things will be very different. Trump has had time to learn from his experience and to prepare. Past Cabinet members like Mike Pompeo (previously Secretary of State and CIA Director) and Nikki Haley (former Ambassador to the UN and rival for the Republican presidential nomination) have been told that there will be no place for them. Only Trump’s unconditional loyalists and true believers should apply. Few of them nominated thus far for foreign affairs or national security positions have any in-depth or senior level experience of these domains at all. The incoming Secretary of Defense is a Fox News host. This is a far cry from the Teams of Rivals that previous administrations favoured, bringing in prominent members of the opposing party such as Robert Gates or Les Aspin at the Pentagon. Moreover, supportive think tanks like the Heritage Foundation or the Cato Institute and reflection groups of ideological soulmates have spent the last four years working on a detailed programme of government for a second (and this time no holds barred) Trump administration putting in place the implementation of plans that were so lacking the first time round.

So we can anticipate a much more unified and disciplined White House operation this time round, as evidenced in the first appointment that President Trump made: to appoint his highly-organised and focused campaign manager, Susie Wiles, to be his Chief of Staff. Even if a compliant and submissive Republican Congress can be expected to rubberstamp nearly all of Trump’s initiatives, we can still predict a flurry of Trump executive orders on his first day in office: to withdraw the US (again) from the Paris Agreement on Climate Change, to close the border with Mexico, to impose a series of tariffs on China and the EU, suspend US arms shipments to Ukraine and to order the Department of Justice to cancel all the legal proceedings against him. There will also probably be a pardon for the January 6 insurgents currently serving their time in prison. In short, the second Trump administration will be different from the first where the rhetoric was disruptive and life was uncomfortable for the Europeans, but defence and trading relations remained in place and life continued as normal. Summits with Vladimir Putin and Kim Jong Un were showy but devoid of substance, and there were no major crises or conflicts to test Trump’s ability as a crisis manager. This was a blessing given Trump’s mismanagement of the two crises on his watch: Covid-19, where he played down the seriousness of the pandemic to keep Wall Street functioning, exposing millions of Americans to infection, and the 6 January 2021 assault on the US Capitol where he froze inside the White House for three hours before telling his mob supporters to go home. Of course, Trump may not get his own way all the time. Voters, including MAGA supporters, may well be repulsed by his policies once the human impact becomes visible. For instance, Trump’s decision to separate the children of migrants from their parents and incarcerate them provoked such a backlash that Trump was forced to abandon the policy. Ambitious politicians in Congress or the states will need to develop their own profiles and following rather than function as Trump cheerleaders. There may be some principled Republicans in Congress ready to oppose some of his policies, for instance, on fossil fuel projects, environmental protection or excessive deregulation. Republicans used to be the party of frugality and debt reduction, whereas Trump’s advocacy of tax cuts risks driving the national debt to unsustainable levels, particularly if the rest of the world backs away from the dollar as the world’s major reserve currency. Some major states, such as California or New York, still have Democratic governors who last time went their own way on CO2 reduction targets, vehicle emissions, climate change protection and data regulation. U.S. business too may not be so happy with tariffs on raw materials and components that they need to import from abroad and having begun the transition to renewable energy and battery production, they may not see the business case for investing in oil drilling when peak oil globally is expected to be reached by 2030. So once the first blast of the Trump march backwards has been fired and the consequences will be seen more clearly, particularly in terms of the global competitiveness of the U.S., there may be issue-by-issue coalitions between centrist Republicans and Democrats. “Never say never” is the golden rule of politics, and Republicans in four years’ time will need to decide whether it is possible (and advisable) to continue Trumpism without Trump, or whether, as the incumbent facing the voters, they need to undertake a course correction.

But four years is still a long way off and the disruption this time round will be worse and more long lasting and consequential than between 2016 and 2020. Europeans will be tempted to adopt the usual wait-and-see approach. How much of the Trump rhetoric was for electoral purposes and how much is for real? Will they be able to influence his advisors and moderate Trump’s policies? Not so easy when few of Trump’s advisers will have the political weight or courage to speak truth to power. The best and most valuable advisers are always those who disagree with you. Will Trump be mainly focused on U.S. domestic politics, dealing with migration and his plans to dismantle the federal government and give more power to the states, so that he leaves the rest of the world to go its own way, perhaps after some initial half-hearted attempts at conflict solving?  Wait-and-see might make sense in more peaceful and stable times, but the risks associated with a Trump presidency are massively higher than last time. So Europe cannot limit its reaction to the old debate of “how to handle Trump”. Yes, having effective “Trump Whisperers” who know how to strike up a rapport with the incoming President will be helpful even if Europe currently seems deficient in personalities that fit this bill. But the new NATO Secretary General, Mark Rutte, has extensive past experience of negotiating with Trump and European leaders like Georgia Meloni of Italy or Andrzej Duda and Donald Tusk of Poland are also on the political right. The views of the latter three on excessive migration may well resonate with Trump. The Lithuanian Defence Minister, Kasciunas, has urged Europeans to talk to the new President about defence, weapons acquisition, China and Iran. Moreover, NATO is in better shape today with 23 out of 32 allies meeting the 2% of GDP defence spending target, Finland and Sweden joining the alliance and NATO taking over the day-to-day management of weapons supplies and training for the Ukrainian army through its new coordination centre at Wiesbaden. Allies are increasing their military production and sending more of their troops to handle NATO’s borders in Eastern Europe. So Rutte should have a stronger hand to play when he sits down with Trump in coming weeks. Of course,  dealing with Trump using his own narrative of hard interests and profit and loss will be important. Trump has little interest in NATO or the EU as defenders of Western values or as stalwarts of the international liberal order. Hearing about America’s international responsibilities and obligations is unlikely to strike a chord with him.  But making Trump aware of European investment in the U.S. and purchase of U.S. military hardware such as F35 aircraft or Patriot air defence systems, or the money that allies pay to host US forces in Europe represents a better approach. All this said, Trump is the kind of leader who tends to see the glass as half empty rather than half full. So what will satisfy him is open to debate. Rather than congratulate allies for reaching the 2% of GDP target, Trump is likely to demand 3% or even more. Meanwhile, the NATO Secretary General has also come up with a new angle to try: that of the increasing support that North Korea, Iran and China are giving Russia in its war in Ukraine and the way that they are drawing closer in an axis of hostility towards the western democracies. Given the Republicans hostility to China and Iran, this argument may resonate as the Axis of the Four is certainly designed to do America down. A standard line is to express confidence that Trump will assume America’s leadership role in the alliance and work constructively with his allies. Given the critical role that the U.S. plays in Europe’s defence, it is understandable that the allies should pull out all the stops to maintain U.S. support and the status quo. As Trump has supreme power, it is sufficient to persuade him as then the rest of the administration and the Republican establishment will fall into line. But the U.S. election results suggest that business as usual will no longer be enough. The US is detaching strategically and psychologically from Europe. It is less willing to defend Europe and no longer interested in upholding the multilateral institutions that it created after World War Two to maintain peace and build prosperity through trade and economic integration. Precisely the ones that have benefited the small and medium sized powers of Europe most. As Europeans mark Armistice Day and recall the long effort and sacrifices needed to defeat militarism and authoritarians launching expansionist wars of aggression in both the First and Second World Wars, there is the sense of a turning point; and a question that can no longer be ducked. Has Europe become so complacent and wedded to its own comfort under the American security umbrella that it no longer has the will (let alone the means) to defend itself? In a world dominated by great power rivalries and weaker international norms and rules, does it have the capacity to identify its interests and unite around them? Does Europe really want to uphold its freedoms, way of life and rule of law against the predators from outside? The moment of truth has been on the horizon for years. It was postponed for a while after the Cold War ended because the US saw the advantage of NATO for getting support for its global war on terror and operations in Afghanistan and Iraq. Indeed, had Kamala Harris won the election that moment would still have arrived, albeit a little later, as she too would have focused on China and Asia and maintained many of Biden’s protectionist policies. Therefore European leaders should not wait for 20 January and Trump’s inauguration to see what the future brings. What we know is far greater than what we don’t. The time to act is now, to prepare Europe for a world in which American power and influence will be greatly reduced and Washington’s attention for global affairs intermittent and erratic. Rather than follow America’s lead, Europeans will have to reduce their dependency on Washington, build new coalitions with new global partners and learn to forge their own path on the world stage. When it comes to climate change, energy policy, pandemic preparedness, trade and technology, Europe cannot afford to be paralysed for 4 years (at least) until the next U.S. election cycle.

The world will move on, as we see already with the expansion of the BRICS, and Europe has to move with it and invest in new structures, as with the recently concluded EU-Japan security agreement. NATO is not the place to debate this strategy as the transatlantic relationship is hard-wired into its DNA and its focus inevitably will be on trying to keep things as they were. The EU, working with the UK, will have to take the lead here. So as the flurry of EU summits, bilateral and multilateral mini summits and pan-European meetings like last week’s European Political Community in Budapest proceed, all seeking responses to Trump’s re-election, European leaders need to find answers to the following questions:

1. What if Trump abruptly cuts off military aid to Ukraine?

There is broad support for Ukraine among Republicans and Trump will hardly negotiate a fair deal with Putin if he leaves Ukraine defenceless. In the past, he has linked continuing US weapons deliveries to Ukraine to Kyiv’s willingness to negotiate a peace agreement, or at least suggested U.S. aid should take the form of Lend Lease style loans rather than grants. The Biden Administration is also committed to delivering as many of the weapons as part of the $9 bn existing budgetary envelope as possible before the transfer of power on 20 January. This week it announced the delivery of 500 additional Patriot and NASAM missiles for Kyiv. The U.S. has also committed to give Ukraine a $20 bn low interest loan as part of a $50 bn package that the EU has also signed up to using the interest on frozen Russian bank assets as collateral and to make the reimbursements. Provided this U.S. aid goes forward and isn’t blocked by Trump, it should help Kyiv to get through the winter.

But Trump (and his entourage like J.D. Vance) have been clear that they want to severely reduce or stop altogether U.S. support for Ukraine.  Of course, Europe has done its fair share too over the past two and a half years and has contributed over €120bn in weapons and financial and humanitarian help so far. The EU has trained 60,000 Ukrainian soldiers. Where there is political will and a clear lead, Europe can deliver. The Czech led consortium to provide 155mm ammunition to Ukraine has procured 980,000 shells out of the one million target thus far. Similar European consortia have provided F16 aircraft, air defence and long range artillery and missiles. Replacing the U.S. contribution will be difficult, especially as many European countries are running very short on stocks. But it will not be impossible. Defence production is being ramped up and the EU could persuade more of its partners to contribute. For instance, South Korea has hinted that it may now send lethal weapons to Ukraine in reaction to North Korea’s entry into the war in support of Russia. Australia recently supplied 40 US M1 tanks and numerous armoured vehicles, and Japan could certainly do a lot more. The UK and France are also pressing the Biden administration hard to allow Ukraine to use their Storm Shadow and Scalp cruise missiles to strike military targets inside Russia. Europe in fact compares well with the United States in terms of the higher percentage of its stockpiles of weapons that it has handed over and the speed of its weapons deliveries. In the U.S., the bureaucratic pace of delivery is agonisingly slow and much of the money that Congress has allocated to Ukraine is being used to replace U.S. weapons already handed over to Kyiv.

Yet the biggest change that Europe could make would be to invest in greater Ukrainian defence production. The country has thousands of companies, large and small, public and private. But they are only performing at one-third of their production potential due to lack of investment, supply of explosives and too few and small government contracts. Ukrainian home-produced drones, anti-ship missiles and longer-range ballistic missiles have proven their worth in driving the Russian Navy away from Ukraine’s Black Sea coastline and in striking Russian airfields, fuel depots, chemical plants and ammunition storage facilities as far afield as the Caspian Sea and Omsk in Siberia. Home-produced weapons in Ukraine will be cheaper than weapons that the EU or its member states have to bid for on international markets. So the EU needs to develop a comprehensive Ukraine Defence Industry Plan to redirect raw materials, chemicals, advanced electronics and metallurgical supply chains towards Ukraine and to underwrite the contracts that the Kyiv authorities can give to their domestic industry. This is an investment in the EU’s own long-term security as a high production and cost-efficient Ukrainian defence sector could supply EU countries with large numbers of drones, long-range missiles, artillery ammunition, battlefield surveillance and intelligence equipment in the future. Zelensky has even proposed that Ukrainian soldiers could replace some of the U.S. forces deployed in Europe in the future.

Europeans in recent days have been at pains to reiterate their commitment to Ukraine for the long haul. We have heard this from Scholz, Macron, Meloni, Tusk and Starmer. The recent UK budget usefully added an extra £3bn in aid for Kyiv. It is now time for Europe to step up and put the actions behind these fine words.

2. What if Trump tries to impose a peace agreement in Ukraine over the heads of the Ukrainians and in Russia’s favour?

Although Trump has frequently promised to end the war in Ukraine in 24 hours, he has not yet proposed a plan as to how he can do this. Peace is also not just the absence of war. A basic ceasefire that gives Ukraine no viable security guarantees and allows Putin a breathing space to reconstitute his forces for more aggression in the future does not help Europe’s security but only makes it worse. If Putin ends up on the border with Poland and the Baltic States, and threatens to attack a NATO country, the risk of the U.S. being involved in war against Russia on account of its collective defence commitments in NATO only increases. So peace in Ukraine could be as detrimental to American security as isolationism proved to be in the 1930s,for it allowed Nazi Germany and Imperial Japan at the time to become militarily stronger, thereby vastly increasing the cost to the U.S. when in 1941, it ultimately had to fight them. Trump will undoubtedly come up with a Ukraine plan soon as it is a campaign promise that he cannot dodge. Moreover those in his circle have floated various trial balloons, such as the territorial concessions Ukraine would be forced to make, whether the promise of NATO membership should be withdrawn or postponed for at least 20 years. Again, we will need to wait and see what Trump comes up with, and how much leverage he has over Putin to induce the Kremlin to make concessions too, such as withdrawing from certain occupied territories or pulling the bulk of its forces and heavy weapons out of pre-war Ukraine. Trump will certainly not want to be seen as caving into Russia or abandoning Ukraine. Kyiv also will need security guarantees and long-term Western support to recover from the war; and it will want to see how the U.S. and its allies intend to contain Russia and dissuade it from further aggression against Ukraine or other European countries, such as Moldova or the Baltic States. Unlike Trump’s previous summits with Putin or Kim Jong Un, Ukraine is a trilateral process where Zelensky has a seat, and a voice at the table.

Yet, Europe has a far greater stake than the U.S. in a Ukrainian peace agreement, and much more to win or lose. The U.S. may try to negotiate, but the implementation of any agreement and its costs will almost certainly be dumped on the EU and Europeans more generally. So Europe cannot leave this to the Americans or be shunted aside. A Russian victory would not only halt the EU enlargement process to Ukraine, Moldova or ultimately Georgia but also cast doubt on the viability of the EU as a security community too. EU authoritarians like Orbán and Fico, or populists to the right or left of the political spectrum will be emboldened to call for the end of sanctions against Russia, the restoration of normal relations and the end of the process of EU integration in security and defence. In sum, the Ukraine peace settlement will define the future of the European project as much as it shapes the future of Ukraine itself. So the EU and the major European states, such as France, Germany and the UK must have a seat at the table, as they have in the past for the various Minsk processes that have dealt with the conflicts in Ukraine, Moldova or Nagorno-Karabakh. European participation will also strengthen Zelensky’s negotiating position and help to ensure that nothing is decided over the heads of the Ukrainians. The immediate task for the EU and UK working together is to define a set of minimal requirements for Russia to meet; for instance, verifiable troop and equipment withdrawals, the return home of all the North Koreans, a demilitarised zone along the border, an international observer force, return of all POWs and displaced persons, the demilitarisation of Crimea to allow Ukraine free access to the Black Sea, continuing military aid to Ukraine for defensive purposes and so on.

3. How can Europe defend itself without relying on the U.S.?

If we look at the bare numbers in terms of troop numbers, reserves, increasing defence spending and the size and quality of the European defence industry in all domains of warfare (land, sea, air, space and cyber), Europe is more than a match for Russia on paper, and should be able to generate more firepower in practice. The reasons that have held it back have been analysed repeatedly for decades and are well known. Lack of integration, too much duplication in research and development and equipment production, poor and bureaucratic procurement systems, lack of critical enablers and over-reliance on the U.S. for key capabilities, such as fighter aircraft, air and missile defence, maritime patrol aircraft, drones, inflight refuelling, precision guided munitions and nuclear deterrence. As NATO has functioned well, despite the occasional ups and downs in Washington, and the U.S. has kept 100,000 troops and ships, aircraft and armour permanently stationed in Europe, the debate was about sharing the burden rather than taking it over altogether.

But the U.S. contribution cannot be taken for granted and NATO’s Article 5 collective defence clause does not legally commit the U.S. to come with military force to the aid of a NATO member facing aggression. Europe now needs a defence policy that is not designed to please the U.S. or maintain the status quo but to serve its own strategic interests. A U.S. contribution would then be a highly welcome add-on rather than a show-stopper. Even if he does not withdraw from NATO formally, Trump may relocate U.S. forces out of Europe, cancel some existing plans such as the installation of U.S. conventional missiles in Germany in 2026 or the upgrading of U.S. military infrastructure in Europe or demand that the Europeans pay all the costs of stationing U.S. forces on the continent. He could change Pentagon plans for the reinforcement of Europe in a crisis or conflict situation. At a minimum, Trump’s rhetoric hostile to the alliance and its lack of value to the U.S. will undermine the credibility of NATO’s deterrence even if the effect is psychological and not one in which U.S. tank or nuclear weapons actually leave Europe.

So Europe needs to act now to boost its military spending and its capacity for collective military responses. The EU should announce a new defence spending target of 3% of GDP to be achieved by 2028 (2.5% by 2026) and agree on a new level of ambition and catalogue of forces geared towards collective defence and high intensity warfare. Hitherto, the level of ambition has addressed an EU response to out-of-area crisis management operations: the scenario of the Balkans and Afghanistan era. This doesn’t mean that the EU needs to divest itself of U.S. platforms and weapons. After all, both Israel and Saudi Arabia are largely equipped by the U.S., but when it comes to military operations, they act very independently of Washington, as the Yemen and Gaza conflicts have underscored. Of course, breaking dependency on the U.S. will be painful and expensive. The incoming EU Commissioner for Defence, Kubilius, has put the cost of an EU air defence and missile shield (an essential capability given Russia’s blanket drone and missile strikes against Ukraine) at €500bn. Various think tanks have reported that reducing dependency on U.S. critical enablers, such as transport, inflight refuelling, deep strike missiles, electronic warfare and anti-radar and counter-battery artillery could cost up to €400bn. But given the EU GDP, and with the participation of the UK, these investments are achievable. It will require imagination and some reprogramming of EU funding. For instance, this week the European Commission is proposing the reallocation of EU regional funds for defence production. The European Bank for Investment has also relaxed its rules for the financing of dual use technologies. The idea of Eurobonds or deficit funding of defence along the lines of the €800bn of borrowing for the EU’s post-Covid recovery plan has received a lukewarm reception in Berlin and The Hague.  But desperate times call for desperate measures, and an overall European strategic approach rather than uneven and ineffective national efforts. The EU needs a Defence Production Act, along the lines of the one in the U.S., to give industry long-term contracts and the incentive to set up production supply chains, train and hire skilled workers and procure the machinery for mass production of weapons and ammunition. The EU could also set up a Defence Research Agency to pool national research and development efforts. This common funding can incentivise private sector investment, particularly if Brussels can remove “blue tape” and other bureaucratic and regulatory obstacles to venture capital funding, startups, patent registration and the certification of new systems and products. Some countries will want a “Buy European” clause to ensure that defence investment is ploughed back into national economies. But given the sense of urgency pragmatism and getting capabilities online quickly and at minimum cost has to be the guiding principle. That suggests something like a 60:40 split as a basic target. For instance, this week Sweden opted for the C-390 military transport aircraft produced by the Brazilian company, Embraer. It is the sixth European country to do so. This means that standardisation of equipment, maintenance and supply chains should be the objective even where that equipment is foreign sourced.

4. What if Trump unleashes a trade war against Europe?

Trump has made massive tariffs the lynchpin of his economic policy even though economists dispute their merits in terms of securing long-term growth and jobs vis-a-vis a free trade system. Tariffs on the EU of around 20% are being mentioned. These mainly concern goods. Countries like the UK which mainly provide services to the U.S. should be less affected. Tariffs have a poor historical record, but they come at a bad time for Europe with anaemic growth in export dependent countries like Germany. Of course we need to wait and see if Trump will implement across the board tariffs or be initially more selective, targeting the usual things like aircraft subsidies and steel and aluminium. He may well dangle the threat of tariffs to extract promises from the EU to progressively reduce its $131bn annual trade surplus with America, or extract trade concessions such as easing the EU’s carbon border tax. Already the Commission President Ursula von der Leyen has suggested that larger EU imports of US LNG gas will help to bring the deficit down. US-EU trade represents $1.3tn  annually, so a trade war could do a lot of damage to both sides of the Atlantic. The Commission had anticipated a Trump victory and tariffs, and has been busy working on plans to mitigate their impact. Retaliation is always the simplest response and Trump’s embrace of massive tariffs on the campaign trail never included any mention of what the U.S.’s major trading partners would do in response, and how a trade war could increase inflation and reduce U.S. exports and, in time, jobs and wages. Tariffs were simplified as a zero-sum game forgetting how the U.S. is dependent on rare earths and other critical minerals and metals and microchips from abroad, even if the Biden administration has taken steps to restore these supply chains and ramp up domestic production over the past four years. Last time round, the EU imposed tariffs on U.S. products such as denim, bourbon and Harley Davidson motorbikes. Next time round, the product list will undoubtedly be longer to include foodstuffs, cars, textiles and wine. The EU might continue to use its tough approach to US tech companies which in its view abuse their monopoly position to crowd out competitors. Microsoft and Google have suffered massive fines at the hands of the Commission and J.D. Vance has even threatened to withdraw the U.S. from NATO if the EU moves against Elon Musk’s X, the source of much global disinformation.

Ultimately, it is harder for the U.S. to break its economic than its security relationship with Europe as this is in the hands of American companies, banks, private investors and consumers as much as the U.S. government. But European policy has to be to avoid a transatlantic trade war as much as to prepare itself to fight one. Fortunately, Trump listens to Wall Street and the bankers. Although Trump will surround himself with financial advisors who like tariffs, there should be other influential voices who will reason the other way.

Having the internationalist argument made by wealthy Americans rather than supplicant foreigners is a better way to influence the next Trump administration. Moreover, hundreds of thousands of U.S. jobs are dependent on European investments in the U.S. From top of the range car production to supermarkets and the luxury goods and retail sector. An investment freeze or reductions in European purchases of U.S. gas could inflict serious harm on the U.S. economy as would more global trading in Euros. Again these are not per se desirable objectives but tools of deterrence to dissuade Trump from acting unilaterally, but rather seek a US-EU trade agreement along the lines of the former TTIP proposal. Unfortunately, Biden was never interested in a trade pact and it probably would have had difficulty obtaining Congressional approval. But Trump may have more authority to push one through if he can be persuaded that in time it will open the EU market to more U.S. goods and services, for instance in pharmaceuticals and health services and products.

5. How can Europe avoid being dragged into a US confrontation with China?

If the U.S. steps out of NATO or removes U.S. forces in Europe to go to the Pacific, Europe has no interest to reward him for abandonment by adopting a more confrontational approach towards China. In any case, and left in the lurch by the U.S., Europe will have to focus all its resources on coping with the threat of Russia. The democracies of the Indo-Pacific moreover will hardly have confidence in the defensive shield of the U.S. if they have just witnessed the U.S. turning its back on its long-standing and loyal allies in Europe. The European approach to China is based on “de-risking” whereas the policy of the Biden administration has seemed more interested in “decoupling”. Biden has maintained all the sanctions on China from Trump’s first term and has added a few more of his own, particularly in microprocessors and advanced electronics. Tariffs too have been imposed on Chinese electric vehicles. The U.S. Treasury and Commerce Departments have imposed sanctions on a number of Chinese banks implicated in financing military related technology transfers to Russia to aid its war against Ukraine.

Europeans also now certainly take a darker view of China and are irritated by Beijing’s open support for Russia and unwillingness to reign it in for its illegal invasion of Ukraine. This was reflected in the strong and consensual language used in the NATO summit declaration from Washington last July. Many European countries (and Canada) have sent warships to the Indo-Pacific to join the U.S. Navy in freedom of navigation operations in the South China Sea and the Taiwan Strait. They are also irritated by restrictions that Beijing has imposed on the operations of U.S. and European companies in China. The EU-China Investment Agreement remains blocked in the European Parliament and the EU has now followed the U.S. in imposing tariffs on Chinese electric vehicles, claiming excessive state subsidies and unfair competition. The EU and individual member states have reinforced Chinese foreign investment screening in key industries and its acquisition of critical infrastructure such as ports, transport and energy. The EU has devised an Anti-Coercion Instrument to prevent trade between used to exert political influence and pressure. Yet, despite the many irritations, Europeans in their great majority want a stable and predictable relationship with China based on the 3 ‘Cs’ of cooperation, competition and confrontation (the latter does not mean military conflict but rather pushing back at Chinese actions that undermine Europe’s security or are viewed as coercive).

So the challenge for Europe with Trump in the White House will be to build its own policy on China, as far as possible and prevent greater U.S.-China hostility from spilling over onto the EU itself. For instance, if the U.S. bans Chinese products or services from the U.S. market (like TikTok or online retail) or imposes 100 to 200% tariffs on certain imports, China may attempt to dump these products onto the European market. On the other hand, a loss of American market access may make Beijing more willing to make concessions to the EU, for instance, in opening the Chinese market or agreeing to long term deals on the supply of rare earths and critical minerals. It will also be important to define a number of areas where the EU wants to work with Beijing on global challenges. At the current COP29 UN meeting on climate change in Baku, the EU is pushing China and other countries like Brazil to increase their contribution to UN funds to reduce carbon emissions and adapt to the already built in impacts of climate change. At COP29, the developing countries most affected by climate change are asking for $1tn a year in climate support transfers. This is undoubtedly an unrealistic amount but it suggests that the EU, as a climate change leader, needs to bring China more to the table. The same is true of pandemic detection and response as well as rules for space exploration or AI regulation where Beijing has shown an interest in being part of the international dialogue. China sent a representative to the UK-hosted AI Safety Summit at Bletchley Park last year. Another task for the EU is to persuade Beijing to forgive more of its debt to the less developed countries, especially in Africa, an area in which China has been reluctant despite its championing of the BRICS and Global South.

Rather than align its China policy on the maximum pressure approach of the Trump administration, Europe needs to coordinate more with India and Asia-Pacific partners as part of this balanced policy. There will be times when it will want and need to join with the U.S., as for instance in deterring Beijing from launching an invasion of Taiwan and respecting the traditional status quo. But this alignment needs to be on a case by case basis and according to an assessment of the EU’s own interests. China will never take the place of the U.S. as Europe’s ally, and the goal of the EU’s China policy is not to be equidistant between Washington and Beijing; Europe will always be in the camp of the democracies. Yet given Trump’s appointment of China hawks to the State Department and National Security Council, the EU has to maintain its diplomatic channels of communication open and build confidence and transparency as far as possible.

6. How can Europe shape its own multilateral diplomatic ecosystem?

The days of looking to Washington to make the diplomatic weather are coming to an end. With a disengaging US, Europeans will need to diversify their trade links and diplomatic relations with other democracies and emerging powers across the globe. With these partners, old and new, it can engage in ‘mini-lateralism’, seeking communities of interest and coalitions of the willing to tackle issues from disaster preparedness and response, climate monitoring, technology standards, resilience and counter-terrorism.  The EU has to be willing and able to build this global partnership network. It has to overcome past political disputes with the UK over Brexit and with Türkiye over its much-delayed EU membership negotiations. The UK will need to choose between hauling close to Washington to preserve what remains of the ‘special relationship’ or throwing in its lot with its neighbours and allies across the Channel; but trying to act as the bridgebuilder between Brussels and Washington with no firm footing in either is likely to prove a thankless task in the years of Trump 2.0. Türkiye as a member of the Islamic community and an aspirant member of the BRICS can facilitate communication with Moscow and the countries in the Caucasus and Central Asia. Meanwhile, investing in closer ties with the states in Western Africa can help Europe to contain the activities of jihadists and Wagner mercenaries in the Sahel. Approval of the Mercosur trade pact would help to draw the countries of Latin America closer to the EU trading system. Other trade pacts with developing countries in Africa, giving them greater access for agricultural products and textiles to the European market, can help to develop their economies and improve ties. In the Middle East, Europe can help fragile states like Lebanon and work more closely with Gulf States like Qatar and the UAE, while refusing to pay for the reconstruction of Gaza unless Israel commits to the creation of a Palestinian state. The EU needs to increase its diplomatic presence in its new target countries and reengineer the External Action Service to develop engagement plans for them. The incoming EU Commission and Council should launch a new EU Global Strategy to set the EU’s options and priorities in a world that will be truly multipolar and no longer revolve around the United States as the dominant superpower. The focus must be on defining the EU’s core strategic and economic interests and how it can increase all its instruments of power and combine them better to increase its global leverage.

It is difficult for politicians to recognise turning points or moments of reckoning. They normally acknowledge them only looking backwards and when it is too late to act. The tendency is to hunker down, hope for the best and wait for the storm to pass. But looking at developments in the US, Europe’s leaders, having experienced Trump’s first term, can no longer claim surprise or ignorance. This is no time to sleepwalk into the disintegration of an international liberal order which has served Europe’s peace, security and prosperity for 80 years. Believing that it is strong enough to go it alone, America is leaving the West – hopefully for only the next four years but we cannot be sure. So the burden of maintaining the West as both concept and operational reality now falls on the Europeans. Cometh the hour, cometh the man – or the woman. Or the institution. We can only pray that at this time of danger and rollback, that old adage proves true.

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.