Serious Pain: What Lies Ahead for the EU After Trump Returns to the White House?

With Donald Trump returning to the White House for a second term, European allies are preparing for four turbulent years ahead under the Republican leader. Trump's campaign rhetoric was sharply critical of European partners, fueling concerns over the significant differences in policy and approach that could shape his second term in the White House.

European Interests

Around 50 European leaders gathered in Budapest on November 7, 2024, for the European Political Community Summit, which was established in 2022 following Russia's invasion of Ukraine.

French President Emmanuel Macron said Europe must defend itself as it prepares for Trump's upcoming presidency in the U.S. 

“There is a geopolitical situation where it is clear that we have two blocs: the United States of America on one side and China on the other, which above all seek their own interests,” Macron told the European leaders.

“I think that our role here in the European Union is not to comment on the election of Donald Trump, to wonder if it is good or not. He was elected by the American people, and he is going to defend the interests of American people and that is legitimate and that is a good thing.”

“The question is, are we ready to defend the interests of Europeans? That is the only question that we should ask ourselves. And for me, I think that is our priority,” he said.

Macron was the most outspoken among his European counterparts, having previously stated in February 2024 that “America's first priority is itself.”

Former Italian Prime Minister Mario Draghi, upon arriving for the Budapest summit, emphasized the urgent need for economic reforms within the EU following Trump's election. He said, “There is no doubt that the Trump presidency will make a big difference in the relations between the United States and Europe.”

In September 2024, Draghi released a 400-page report suggesting that Europe must return to growth by investing heavily in digital innovation, green transformation, and defense industries.

Draghi's report painted a grim picture of Europe lagging behind the U.S. economically and dangerously increasing its dependence on China for key raw materials and strategic technologies.

In the report, the returning U.S. billionaire president promised to reduce the U.S. trade surplus with the EU by imposing tariffs on European imports, while per capita income in the U.S. had nearly doubled compared to Europe since 2000.

He estimated the necessary investments in Europe at between 750 and 800 billion euros annually, more than the U.S. Marshall Plan that supported Europe's post-World War II reconstruction.

This presents a major challenge for EU countries, which are focused on reducing their debts and budget deficits.

It was clear that European leaders in Budapest aimed to present a united front regarding Trump's return to the White House.

No doubt, the most apparent repercussions of the Republican candidate’s victory over Democratic rival Kamala Harris would be felt in Ukraine, where Trump promised to end the war swiftly, forcing Kyiv to make concessions to the Russian invaders.

Ukrainian President Volodymyr Zelensky, speaking before the European leaders, emphasized that U.S.-Europe relations must not “deteriorate” but “be valued” after Trump's victory.

He reiterated Ukraine's rejection of “concessions” to Moscow, stating that such compromises would harm all of Europe.

Trump's Promises

Kyiv's remarks stem from Trump's belief that this war should “never have happened” and his pride in his “very good” relationship with Russian President Vladimir Putin, who will likely seek a bilateral meeting with him after taking office on January 20, 2025.

Trump’s first administration from 2017 to 2021 served as a test for U.S.-European relations, particularly with NATO allies. Throughout his campaign, Trump repeatedly questioned organizations like NATO and often criticized the billions of dollars spent on the military alliance that supports Ukraine in its battle against Russia’s invasion.

“NATO was busted until I came along,” Trump said at a rally in Conway, South Carolina. “I said, ‘Everybody’s gonna pay.’ They said, ‘Well, if we don’t pay, are you still going to protect us?’ I said, ‘Absolutely not.’ They couldn’t believe the answer.”

Trump said, “One of the presidents of a big country” at one point asked him whether the US would still defend the country if they were invaded by Russia even if they “don’t pay.”

“No, I would not protect you,” Trump recalled telling that president. “In fact, I would encourage them to do whatever  [..] they want. You got to pay. You got to pay your bills.”

Throughout his campaign, Trump regularly criticized NATO allies for not sufficiently funding the alliance and repeatedly threatened to withdraw from NATO if he returned to the White House.

This prompted President Joe Biden to say in a statement on February 11, “Donald Trump's admission that he intends to give [Russian President Vladimir] Putin a greenlight for more war and violence, to continue his brutal assault against a free Ukraine, and to expand his aggression to the people of Poland and the Baltic States are appalling and dangerous.”

Trump had previously written on his Truth platform that the U.S. should end all foreign aid in the future, replacing it with loans instead.

His comments on NATO’s security and Article 5 solidarity are seen by some as benefiting Russian President Putin, who seeks to expand into Eastern Europe. Under Article 5 of NATO’s founding treaty in April 1949, any attack on one member state is considered an attack on the entire alliance and triggers a collective response.

Trump’s return to the White House raises concerns about potential shifts in U.S. foreign policy, particularly regarding the military support President Biden’s administration has provided to Ukraine since 2022 in response to Russia’s invasion.

Republicans in the U.S. Congress have been behind halting and obstructing further military aid to Ukraine, under Trump’s personal pressure.

NATO is still the bedrock of Europe’s security. “The first implication for the alliance is how to continue support for Ukraine if there's an expected drawdown of military assistance from the U.S.,” said Ed Arnold, senior research fellow for European security at Britain's Royal United Services Institute.

“Ukraine fears being forced into an unfavorable peace deal — and Europeans might change their calculations.”

“There might be a bit of a worry where there's some within Europe who say, ‘Why would we ramp up aid now if there's going to be a negotiated settlement fairly soon?’ And I think the real risk for Europe as a whole — the EU but also NATO — is that actually the U.S. and Russia might start to do these negotiations without them,” Arnold told VOA.

Interwoven Concerns

In addition to Ukraine, other positions taken by the elected U.S. president are causing concern across Europe and around the world, such as his threats to sever military ties, impose hefty tariffs, and address environmental issues.

Notably, when Trump entered the White House during his first term, he withdrew the U.S. from the historic 2017 Paris climate agreement.

Despite growing calls in recent months to bolster European strategic autonomy, the European bloc appears to have been caught off guard by Trump’s re-election victory.

“I don't think they prepared for this,” said Guntram Wolff of the Bruegel think tank. “There is no fully discussed plan on what to do now -- at the EU level, but also at the Franco-German level.”

On the economic front, amid concerns about Trump’s plans to impose tariffs, there are fears that each country might handle the matter individually with Washington.

Trump expressed his intention to raise tariffs on all products entering the U.S., referring to the European Union during his campaign as a “mini China” exploiting its American ally through a trade surplus in its favor.

“The [Trump] claims of putting about 60% or more tariffs on all imports from China will have to have a major disruptive impact on world trade, and there will be repercussions on the EU, on Europe, on the U.K. and elsewhere. We can expect also tariffs on imports from the EU as well,” said Garret Martin, co-director of the Transatlantic Policy Center at American University in Washington.

“One element that I think is going to be absolutely critical for Europe, for the EU, is to work on protecting its unity and its unanimity. Trump, I think, is likely to try to adopt a divide-and-rule approach,” Martin said.

Trump’s pledge to boost oil and gas extraction and ship more fossil fuels abroad has also raised alarm among environmental advocates.

As the U.S. is responsible for more than a tenth of global greenhouse gas emissions, any shift in U.S. climate policy has worldwide consequences.

A hotter planet means more disasters, including in the EU, which must prepare for increasingly severe climate impacts.

Some fear that Trump's victory will diminish global momentum for climate action, making the goals of the Paris Agreement harder to achieve.

Although U.S. natural gas exports hit a record high in 2023, Trump aims to reverse Biden’s freeze on permits for new liquefied natural gas (LNG) projects, a restriction that has created uncertainty in the European market.

Ultimately, if Trump goes ahead with even half of the ideas he’s floated on the campaign trail, the European economy is likely to face serious pain.

Quoted by Politico, analysts at Goldman Sachs said the euro could drop as much as 10 percent against the dollar if the new administration enacts its across-the-board tariff plan, while earnings among a group of Europe’s largest companies could fall by more than 5 percent next year.