Donald Trump's return to the White House, coupled with full Congressional control, is set to reshape global policies and exert pressure on Europe. With Republicans commanding both the House and Senate, the geopolitical landscape is shifting, leaving the European Union (EU) bracing for trade disruptions, defence challenges, and climate setbacks.
A New Era of Trade Tensions
The revival of Trump’s "America First" agenda raises concerns about heightened trade tensions. Threats of tariffs on European goods, particularly cars, could significantly impact major EU economies. Goldman Sachs projects that a 10% blanket tariff on US imports might reduce euro area GDP by 1%, hitting Germany hardest with a 1.1% contraction.
However, it’s not just the tariffs but the uncertainty surrounding trade policy that poses the most risk. Analysts warn that businesses might delay investments and reconfigure supply chains in anticipation of potential disruptions, undermining growth across the bloc.
Defence Responsibilities Amplified
Trump's criticisms of NATO and his transactional foreign policy signal reduced US involvement in European security. To meet NATO's 2% GDP defence spending goal and address potential funding gaps, the EU would need to allocate an additional 0.5% of GDP annually.
While these investments could enhance military preparedness, experts like Engjellushe Morina from the European Council on Foreign Relations caution that they come with limited economic benefits and significant risks. Europe must strengthen its security role to prevent strategic vulnerabilities, particularly in the face of Russian and Chinese ambitions.
Climate Policies Under Threat
Trump’s scepticism toward climate change and his opposition to global environmental agreements could undermine international efforts on climate action. This shift threatens the EU's Green Deal and global climate goals, potentially leaving the EU isolated in its pursuit of sustainable energy and environmental policies.
A Wake-Up Call for Europe
Former European Commission President José Manuel Barroso views Trump’s re-election as "shock therapy" for Europe, urging EU leaders to address systemic weaknesses. Barroso and other experts emphasize the need for decisive action, including mobilizing an additional €750-€800 billion annually to remain competitive globally.
Niclas Poitiers from the Bruegel think tank highlights the importance of geopolitical autonomy, especially in areas like defence and climate policy, to mitigate risks stemming from decreased US engagement.
As Europe navigates these challenges, Barroso’s assertion that "Europe will be forged in crises" echoes louder than ever. With Trump's re-election weeks away, the EU must act swiftly to safeguard its economic, political, and environmental future.
Source: Euronews
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