As happens to many, I still remember the moment when I found out that Trump had won the elections in 2016. The feeling of surprise, the general confusion, the uncertainty about what was to come. I also remember that at that time a very brilliant friend had been warning for many months that Trump could win. Around him, no one simply believed him.
Given Trump’s second victory, I asked my friend about his opinions regarding the new mandate, the so-called Trump 2.0, and he responded with a cryptic phrase: Everything is the same, but it is not the same.
He was referring to American domestic politics, to the clear victory that Trump had achieved on this occasion in the Senate and the House of Representatives, and to the appointments that were being announced. But I thought that same phrase could also be applied to the trade relationship between the EU and Trump. In some ways, everything will be the same but it will not be the same.
Trump is still Trump, he maintains his mercantilist vision of the economy, his protectionist obsession with the trade balance, and his threats regarding the use of tariffs, despite the known negative effects that they can create internally in terms of inflation, productivity, or of disruption in value chains.
However, in front of that Trump who “has not learned new tricks”, as the saying would say, is an EU that has been changing substantially since that distant 2016, although sometimes we do not perceive it. Paraphrasing Neruda, we, those of then, are no longer the same.
We have been assuming that this model in which we subcontracted our security to the US, our production to China and our energy to Russia is no longer viable, and we must react. We have understood that the United States is no longer the intimate ally that we could always and unconditionally count on, but rather a partner with whom we will have to negotiate each term of our relationship, in accordance with the transactional logic that Trump imposes on relations. And increasingly we no longer see China as both an “ally, competitor and systemic rival” (as the Commission stated in 2019), but simply as a rival.
Although there are currently weak leaderships in France and Germany, a strengthened leadership is emerging in the European Commission, convinced of the need for two things: a new international economic policy by the EU, in which geopolitics and geoeconomics go hand in hand, and a more assertive attitude in our commercial policy, to defend ourselves against unfair competition and security risks.
Given the certain conviction that we are falling behind, the EU is now absolutely focused on its competitiveness. And it is willing to address various challenges to promote it: reindustrialization, changes in competition policy (state aid, takeover bids, or rules on foreign investments), or reduction in energy prices, among other measures. All issues are already seen through the prism of competitiveness, including trade policy.
This trade policy will also be increasingly linked to the security and sustainability objectives of the EU, expanding the use of trade defense instruments and seeking to diversify relations and develop them with areas such as Latin America or the Indo-Pacific. In short, a context of internal mutation in the EU, already perceptible but with a future and still uncertain results.
We all remember Trump’s first term. Aggressive tariffs, trade tensions, retaliation and disagreements. On this occasion everything could be repeated. Protectionism and unilateralism will continue to be some of its hallmarks.
Trump 2.0 will be a challenge for the EU and for our unity. Although this time it doesn’t catch us by surprise. The European Commission has had time to prepare, with plans and possible actions in case the threats of a trade war materialize. And above all, we have begun that internal mutation, in which the concept of “economic security” will be a permanent reference, and trade policy will be used increasingly as an instrument to achieve geopolitical goals.
In reality, no one knows very well what will come. It is foreseeable that trade threats will occur as a negotiating trump card (especially in sectors such as automobiles or agri-food), tensions, inflationary pressures and variability in exchange rates. As always with Trump, everything will be both unpredictable and transactional. But this time we will find an increasingly different EU.
Because this time everything will be the same, but it will not be the same.