Belgium (Brussels Morning Newspaper) President Trump’s emphatic return to the White House in 2025 is set to initiate a seismic shift in US foreign policy, with profound implications for the European Union. His “America First” doctrine, a blend of transactional diplomacy, unilateralism, and skepticism of multilateral institutions, threatens to destabilize the transatlantic alliance, reshape trade dynamics, and test Europe’s capacity for strategic autonomy.
Trump’s foreign policy prioritizes bilateral deals that deliver immediate, tangible benefits to U.S. interests. This approach, labeled “transactional diplomacy”, relies on leveraging tariffs, sanctions, and security commitments to extract concessions from allies and adversaries alike. For Europe, this means threats of auto tariffs, to the estimate of 10–20% on German car exports, and demands for increased defense spending in exchange for NATO support. Unlike previous administrations, Trump views alliances not as shared commitments but as transactions requiring constant renegotiation.
An Εra of Τrade and Τariffs
Trump’s trade policy aims to reduce the U.S. trade deficit, particularly with the EU, which was at the rate of $200 billion in 2024. Proposals include universal tariffs of 10–20% on imports, and sector-specific penalties, such as 60% tariffs on Chinese goods, which could trigger retaliatory measures and global trade fragmentation. For Europe, the risk lies in disrupting supply chains, inflating costs for manufacturers, and exacerbating economic stagnation, where Goldman Sachs estimates a 1% GDP contraction in the eurozone under a 10% tariff regime.
The Trump Doctrine dismisses multilateral frameworks like the Paris Climate Accord, the World Health Organization, and NATO’s collective defense principles. Trump has repeatedly threatened to abandon NATO unless members meet higher defense spending targets, now pushing for 5% of GDP, up from 2% that is the existing accord of the alliance. This stance undermines Europe’s reliance on U.S.-backed security guarantees, particularly amid Russia’s ongoing aggression in Ukraine.
The EU faces acute exposure to Trump’s tariff threats, especially Germany, whose auto industry contributes 5% of GDP. Retaliatory measures, such as EU tariffs on U.S. agricultural goods or digital services taxes, could escalate into a tit-for-tat spiral. However, Brussels initially seeks to appease Washington by offering concessions, such as purchasing more U.S. liquefied natural gas, aligning on China de-risking strategies, and increasing defense equipment imports.
Yet, Europe’s internal divisions complicate negotiations. While France and Germany advocate for a unified response, Hungary’s Viktor Orban and Italy’s Giorgia Meloni, declared Trump allies, may undermine EU cohesion by pursuing bilateral deals. The fragility of Germany’s coalition government and Macron’s weakened position further erode Europe’s bargaining power.
Trump’s demand for higher NATO spending places Europe in a fiscal bind. Meeting a 3–5% GDP target would require an additional 0.5% of EU GDP annually, straining budgets already stretched by energy transitions and social welfare. While Eastern European nations like Poland support increased militarization, Southern EU members resist diverting funds from economic recovery.
Ukraine is now a European Ιssue
The U.S. withdrawal from Ukraine aid amplifies risks. Trump has signaled skepticism about continued military support, urging Europe to “pay for its own security”. Without U.S. backing, the EU would struggle to counter Russian advances, forcing reliance on fragmented national armies and untested initiatives like the European Defence Union.
Trump’s vow to “end the Ukraine war on day one” raises alarms in Kyiv and Brussels. His preference for a negotiated settlement, potentially involving territorial concessions, contradicts EU and Ukrainian red lines. While Germany and France push for continued arms shipments, Trump’s appointments, such as National Security Advisor Mike Waltz, emphasize burden-shifting “U.S. taxpayers have footed the bill for far too long”. A U.S. retreat could encourage Putin, testing Europe’s resolve to uphold sanctions and military aid. The EU’s proposed €750–800 billion investment in defense and tech competitiveness, per Mario Draghi’s recommendations, remains aspirational amid political deadlock.
Trump’s combative stance toward China creates both alignment and friction with Europe. The EU has begun de-risking, imposing tariffs on Chinese electric vehicles and scrutinizing tech investments, but diverges from U.S. decoupling strategies. Trump’s proposed 60% tariffs on Chinese imports could flood EU markets with dumped goods, undercutting European industries. Meanwhile, Hungary and Greece resist hardline policies, preferring to deepen trade ties with Beijing.
Faced with Trump’s transactional demands, Europe must choose between three paths. Accommodation by aligning with U.S. priorities on China and defense, at the cost of climate goals and digital sovereignty. Fragmentation, where Member States are pursuing bilateral deals, fracturing EU unity and empowering far-right leaders. Strategic Autonomy, by accelerating defense integration, industrial competitiveness, and green transitions to reduce dependency. French President Emmanuel Macron champions the third path, arguing that “Europe will die” if it fails to assert independence. Proposals include a €880 billion defense fund, centralized procurement, and a “Buy European” mandate to counter U.S. and Chinese dominance. However, political divisions and economic stagnation threaten to disrupt these ambitions.
The Trump Doctrine challenges Europe to navigate an era of great-power rivalry and transactional geopolitics. While Trump’s policies may push long-pending reforms in defense and competitiveness, they also risk economic destabilization and security vacuums. The EU’s response will determine whether it emerges as a cohesive global actor or submits to internal cacophony and external pressures. As former ECB President Mario Draghi warned, “Europe will be forged in crises”, and Trump’s presidency may be the ultimate stress test.
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