What does Trump’s (re)election mean for the EU?

What does Trump’s (re)election mean for the EU?

A second Trump presidency is expected to influence EU policies—and consequently its budget priorities—in areas like energy, mobility, defence, and more. Let’s see how!

Trade

Trump has promised to impose tariffs on all imports, including those from the EU, aiming to reduce the U.S. trade deficit – particularly with China and open new markets.

The EU already missed its chance to resolve trade disputes with the Biden administration over steel tariffs, green subsidies, and the WTO’s top court, and tensions might escalate with Trump’s return to office.

Mobility & Energy

“I want German car companies to become American car companies,” Trump recently told his supporters, promising “the lowest taxes, the lowest energy costs and the lowest regulatory burden” for automakers that choose to move production to the U.S. and “a very substantial tariff” on others. Given the ongoing crisis in this sector across the EU, this is far from encouraging. Moreover, Trump and his advisors remain openly sceptical about green policies and sustainable transport and mobility solutions.

Defence

Trump’s win might reduce Europe’s reliance on U.S. defence support – considering Trump’s previous threats to leave NATO. This shift may push EU countries towards two (different) directions:

• Strengthen their own defence capabilities, possibly through joint borrowing to boost the EU defence industry, greater defence spending, and accelerated security talks;

• Or, oppositely, seek closer ties with the U.S. by increasing purchases of American-made weapons, despite the EU’s push for local procurement.

Competition

Trump’s win may speed up European efforts to rely less on the U.S. as a partner pushing on with an economic security strategy that emphasizes European production and a wide range of international suppliers and markets, aligning also with Draghi’s recommendations.

Energy

Donald Trump’s energy plan focuses on expanding oil and gas production, aiming to increase fossil fuel exports and lift restrictions on new LNG projects. While this approach appeals to the energy sector, it raises environmental concerns. Trump also opposes the green transition and may seek to repeal the Inflation Reduction Act (IRA), which supports clean energy initiatives and has bolstered U.S. competitiveness in renewable industries.

Repealing the IRA could shift competitive advantages back to Europe in sectors like wind, solar, and electric vehicles.

Let’s see what the next four years will look like!

Image source file: By Shaleah Craighead – https://www.whitehouse.gov/people/donald-j-trump/ (archive), Public Domain, https://commons.wikimedia.org/w/index.php?curid=63768460

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