[Trump II] - The Greatest Threat to Europe Lies in Its Inability to Act

The US has voted and the dust has had time to settle. Unlike 2016, the EU - and most member states - started planning for the possibility of Donald Trump’s return to power a full year before the election. Europe is not more prepared, but at least his victory was not the shock it was eight years ago. It also confirms a truth that Europeans have long tried to ignore: Trump, or rather Trumpism, is here to stay. And with that, Europe faces a new and more transactional transatlantic alliance.

The threats Trump poses to Europe are well known. He has signalled his intention to end the war in Ukraine, even if that means ceding territory to Russia. The US is likely to continue retreating from Europe to focus on Asia instead. It will have an "America First" economic approach that supports US industry and rectifies its trade deficit, especially with China and Europe.

It also needs to build diplomatic muscle and, as much as possible, coordinate its messaging when standing up to Washington. Only time will tell whether the Trump shock paid off.

The Fate of Ukraine

Donald Trump won the 2024 election on the promise to end America’s involvement in "endless wars" - a pledge that now casts a shadow over the ongoing war effort in Ukraine.

There are currently two scenarios floating about, both of which raise important questions for Europe. The first is a quick negotiated settlement between Moscow and Kyiv, in which Ukraine agrees to relinquish occupied territories in exchange for a ceasefire, possibly accompanied by a buffer zone patrolled by peacekeepers. In this scenario, it is unclear whether the US would continue supplying Ukraine with arms for self-defense or take part in the peacekeeping missions.

The second is that President Trump delays peace talks and continues to support Ukraine - with arms, intelligence, training - until Kyiv is in a stronger position to negotiate with Russia. Moscow would not be able to claim victory - an outcome that Trump’s national security adviser Mike Waltz and nominee for the State Department, Marco Rubio may advocate for. Both are known for their hawkish positions, including on Russia.

Out of the two scenarios, European capitals have a clear preference for the second. But Europe’s concerns go beyond Ukraine’s immediate military needs. There is a deep worry about the long-term stability of any peace agreement that does not come with credible security guarantees. First, there is the fear that Vladimir Putin, having secured a temporary ceasefire, would use the pause to rearm and rebuild Russia’s military forces, before invading again. Second, there is the concern for Ukraine’s internal stability. For Ukrainians who have endured years of war, the promise of peace without meaningful security guarantees may be insufficient to encourage them to stay and rebuild their lives. Without assurances that their country will remain safe, many may opt to leave for Europe in greater numbers, placing further strain on an already stretched immigration system.

It is here that Trump’s position on security guarantees becomes crucial - and uncertain. If the US steps back from its traditional role as the guarantor of European security, the burden will fall squarely on European shoulders. Few believe Ukraine will be granted NATO membership, especially with Trump in the White House. Meanwhile, Europeans have yet to agree on what these security guarantees could look like. One option would be for permanent troops, from countries in Europe and beyond, stationed in Ukraine and ready for combat if Moscow invaded again. What is unclear here is whether Europeans would be in a position to respond without US intelligence support and prior sign off on use of American arms.

Securing Europe without the US

The US has long played a pivotal role in European security through its nuclear deterrent, stationed troops, and intelligence-sharing. But as the transatlantic alliance becomes more transactional, Europe faces the uncomfortable challenge of securing its own defense without relying on Washington.

There is little doubt that the US nuclear arsenal serves as a powerful symbol of American influence abroad - something Trump values. However, it’s equally likely that President Trump will demand something in return: higher purchases of US arms, for example, or a more favorable regulatory environment for US tech giants. Whether the EU can meet these demands will depend on the degree of consensus among the 27 member states. Cooperation with key allies, like the UK, will also be essential.

During the Covid-19 pandemic, the EU temporarily relaxed state aid to allow EU governments to support companies during the crisis. Changes to EU state aid rules should make it easier, at least in theory, to allocate more funding to the defence sector. However, Europe will still need to rely on foreign suppliers when European alternatives are not feasible.

On the question of defence spending, the EU has pledged to spend more but the modalities of funding remain an issue. Should the EU borrow jointly, reallocate existing funds, or issue defense bonds? Germany’s position will be central to any decision on joint defense spending, and the pressure on Berlin to relax its strict debt limits - set by its so-called "debt brake" - will be intense.

However, not all EU countries have a sophisticated defence industry so changes to funding and competition rules will inevitably benefit some nations more than others. Those countries with advanced defense industries, like France, Sweden and Germany, may be asked to compromise on other EU files, in return for support on the relaxation of the EU’s state aid rules for the defence industry.

Protecting the single market

When Donald Trump first became president in 2017, he did so with a promise to overhaul the US’ trade relationships, bringing them in line with his vision of "America First." His goal was clear: protect US industry and address trade imbalances, even if this means rewriting global trade rules.

Central to Trump’s re-election campaign was his vow to correct the U.S.’s perceived trade wrongs. Tariff - which he has called "the most beautiful word in the dictionary" is his preferred tool to achieve US strategic aims abroad. On November 25th, the President-elect said that he would impose levies of 25 per cent on all US imports from Canada and Mexico on his first day in office, and an extra 10 per cent tariff on Chinese goods. He has accused them of enabling illegal immigration and facilitating drug trafficking. A 10% tariff on European goods entering the U.S. would hit several sectors particularly hard -- none more so than the automotive, retail, chemical and steel industries.

While Trump may not be a fan of subsidies, these landmark measures have generated new jobs, particularly in Republican-leaning states, making them politically difficult to overturn. Similarly, with so many tech giants backing Trump, the President-elect will want to make sure Silicon Valley can continue to attract the best talent and innovation the world has to offer.

A more aggressive U.S. approach toward China - likely to involve sanctions and tariffs -could prompt China to redirect some of its trade away from the U.S. and toward other markets. The EU, as the world’s largest trading bloc, would be an obvious alternative destination. But the pressure on Europe wouldn’t stop there. Washington would likely push the EU to align more closely with U.S. policy on China, particularly when it comes to export controls and restrictions on sensitive technologies. This would affect not only multinational companies with ties to both markets but also Europe's broader strategic autonomy.

Yet, paradoxically, Trump’s approach may force Europe to face some uncomfortable truths about its own economic vulnerabilities. The EU has already begun to reexamine its own approach to industrial policy and is looking at ways to invest more heavily in innovation, infrastructure and homegrown talent to compete on a global scale, thanks to reports by Enrico Letta and Mario Draghi. Von der Leyen has also made economic security a key pillar of the Commission’s agenda, which should include measures to respond to US pressure. Dialogue with like-minded partners, such as Canada and Japan, will also become more important.

Getting the EU in Shape to Act

The real threat, however, is not what Trump does but whether the EU is able to respond fast enough. Historically, the EU has demonstrated remarkable resilience in times of crisis, finding ways to unify, even in the face of deep internal division. It did so in response to the COVID-19 pandemic, when European countries set aside their differences to collectively invest in vaccines and to borrow jointly to support the economy. And it did so again after Russia’s invasion of Ukraine, when the EU swiftly imposed sanctions on Moscow, provided military support to Kyiv, and weathered the storm of rising energy prices.

However, in those earlier crises, Europe was buoyed by two crucial elements: a functioning Franco-German engine and strong leadership from the European Commission. Today, France and Germany are both facing domestic challenges. Their bilateral relationship is also at an all time low. In 2018, when the EU came perilously close to a trade war with the U.S. over tariffs on steel and aluminum, the then-European Commission President Jean-Claude Juncker diffused the tension by promising President Trump that the EU would increase its imports of U.S. liquefied natural gas (LNG) and soybeans. While imports did increase, the change was largely perceived as cosmetic. This time round, Trump has shown little interest in engaging with Brussels. Europe’s response will need to be more agile but it will also be more dependent on the strategic alliances that individual EU member states can forge with Washington. Whether it’s Italy’s Giorgia Meloni, Hungary’s Viktor Orbán, or even Macron-Trump’s choice of interlocutor will depend not only on the issue at hand, but on who can offer him the best deal.

If the EU can manage that, it will not only weather the storm of Trump’s protectionism but emerge stronger for it. Time will tell whether the EU met the challenge.

Copyright image : Anatolii STEPANOV / AFP