European leaders have been quick to offer their congratulations to Donald Trump after he beat Kamala Harris and made his way back to the White House. However, there’s an underlying concern that we might be heading into another round of economic conflict.
For over a year now, European diplomats and their governments have been gearing up for the possibility of a Trump win, focusing more on strategies to shield their economies from potential trade issues.
When some officials woke up to the election results on Wednesday, they found it hard to accept what had happened. I see it, but I don’t want to believe it, said one EU official who preferred to remain anonymous because of the delicate nature of transatlantic relations.
But honestly, I’m not as shocked as I was last time. Many European leaders were not fans of Trump’s combative approach during his first term and experienced quite a bit of tension with him.
That’s why they celebrated Joe Biden’s victory in 2020, hoping for smoother interactions moving forward. Another EU source, also wishing to stay unnamed due to the sensitive relationship dynamics, summed it up: It’s not ideal again. But at least I’m not as taken aback this time around.
EU leaders are getting together on Thursday!
On Wednesday morning, a number of EU leaders including Ursula von der Leyen, Emmanuel Macron, Pedro Sanchez, Giorgia Meloni, and Viktor Orban were quick to congratulate Trump.
Interestingly, opinions about him vary across Europe. For instance, Hungary’s Prime Minister Orban has previously expressed his admiration for Trump and even mentioned that he would celebrate with champagne if Trump wins again.
This Thursday and Friday, these leaders will gather in Budapest for their regular meeting where they’ll have a chance to discuss the future of transatlantic relations.
Trump has hinted at slapping an extra 10% tariff on European countries and warned that the EU could face serious consequences for not purchasing enough American products. Trade with the U.S. is vital for Europe; in fact, the EU and U.S. share the largest trade relationship globally—hitting a record 1.2 trillion euros ($1.29 trillion) in 2021 according to European Commission data.
Any new tariffs could worsen the already sluggish economic growth across Europe.
An anonymous source from within the EU noted that there would be an initial discussion about the U.S. election results during their meeting in Budapest ahead of the European Political Community (EPC) gathering starting on November 7th.
The source mentioned they’re curious about Trump’s rhetoric moving forward but highlighted that Ukraine will remain a significant challenge regardless of what he says. Their main priority? Maintaining unity among European nations.
The biggest financial disaster you can imagine.
On Wednesday morning, analysts at ING shared some concerning news: Europe’s worst economic fears have become a reality with Trump’s reelection.
They warned that a potential new trade war could drag the euro zone from its already sluggish growth straight into a serious recession.
The German economy, which is heavily dependent on trade with the U.S., could face significant challenges if tariffs are imposed on European cars, according to James Knightley and his team.
Even though European leaders say they’re ready for another term of Trump in office, it’s still uncertain whether he might encourage deeper ties among European nations, especially given the domestic issues many of them are dealing with. Europe seems to be taking a wait-and-see approach regarding Trump’s actual policies.
At last month’s IMF annual meetings in Washington, D.C., German Finance Minister Christian Lindner cautioned that there could be consequences if the U.S. starts a trade war with the EU.
He emphasized the importance of diplomatic efforts to persuade whoever takes office that engaging in trade conflict with Europe wouldn’t benefit America, adding that retaliation would definitely be on the table if necessary.