Davos (Brussels Morning Newspaper) – European Commission President Ursula von der Leyen raised concerns about the threat of a ‘global race to the bottom’ utilizing economic means such as export controls, sanctions, and tariffs.
Von der Leyen, at the World Economic Forum’s annual meeting, talked of a new period of intense geostrategic competition.
“As this competition intensifies, we will likely continue to see frequent use of economic tools, such as sanctions, export controls, and tariffs, that are intended to safeguard economic and national security,”
She stated. However, she expressed innovation must not be suppressed.
“In this spirit, we will need to work together to avoid a global race to the bottom,”
She said.
“Because it is in no one’s interest, to break the bonds in the global economy. Rather we need to modernize the rules to sustain our ability to produce mutual gain for our citizens.”
Why is Von der Leyen concerned about economic tools’ impact?
Ursula’s remarks come as a day before; on January 20, 2025, President Donald Trump stated that he wanted to turn the U.S. trade deficit with the European Union around, calling for either tariffs or more energy exports from the U.S. to Europe. This is part of his larger “America First” policy, which has been to reduce trade imbalances and protect American industries throughout history.
How did Von der Leyen advocate for modernizing trade relations with the USA?
European Commission President Ursula von der Leyen has previously spoken about trade issues between the EU and the USA, especially on tariffs and economic cooperation. In a joint statement with President Biden on October 31, 2021, she mentioned the commitment to negotiate a carbon-based arrangement on steel and aluminum trade, emphasizing the need to restore transatlantic trade flows and address common challenges in these sectors.
Von der Leyen pointed out that this cooperation is aimed at fair competition and support for workers while addressing climate change. She has also been consistent in her call for an active approach to trade agreements since Trump’s re-election, implying that the EU needs to protect its trade interests in the face of increasing global tensions.
