Welcome to Euractiv’s Global Europe Brief, your weekly update on the EU from a global perspective. You can subscribe to receive our newsletter here.
Dear readers, good Sunday afternoon!
After three weeks spent on the other side of the Atlantic, the shock of the election outcome is slowly replaced by thoughts of what can be done to keep transatlantic relations alive.
In today’s edition:
- Europeans start mulling their trade options for Trump
- Germany still hesitates on Taurus, France now hesitates on EPF funds
With less than two months to go to prepare for another Trump administration, EU member states have started considering what bargains they could strike with the next man in the White House.
Earlier this week, for the first time, EU trade ministers discussed the bloc’s future transatlantic trade ties since Trump won re-election this month on a platform which included threats to slap 20% tariffs on all goods arriving from the EU to the US.
Outgoing Trade Commissioner Valdis Dombrovskis seemingly extended a tentative olive branch to the incoming Trump administration, stating that it was not in the EU’s interest to reopen old trade disputes with Washington.
“I would say there is a broad view among the ministers that we should maintain constructive engagement with the US,” Dombrovskis told reporters in Brussels.
“We should not be opening old trade disputes, and we should be avoiding new trade disputes,” he added.
So far, Trump and his entourage seem to be preparing for a rather confrontational approach. This comes after the Republican warned the EU would need to pay a “big price” for its consistent trade surplus with America.
If the Trump administration would go all-in on tariffs, most EU diplomats believe the bloc would be ready to strike back fast and hard.
However, until this worst-case scenario happens, thoughts have started circulating about what “positive offer” the bloc can make to Trump that would benefit both sides.
“The way to engage with the Trump administration is to propose something positive for them, and for us—he [Trump] likes making deals, so we discuss common interests and then go into negotiations,” said one EU diplomat.
“Yes, this is classic quid pro quo thinking, but we might not have much choice,” they added bluntly.
According to several EU diplomats and officials contacted by Euractiv, who have been granted anonymity to speak freely, a range of thinkable trade options could primarily include energy and defence goods.
European Commission President Ursula von der Leyen earlier this month already suggested that one way to deter Trump from imposing new tariffs would be for Europeans to buy more liquefied natural gas (LNG) from the US.
While the EU still buys significant amounts of energy from Russia, von der Leyen proposed: “Why not replace it [with] American LNG, which is cheaper for us and brings down our energy prices? It’s something where we can get into a discussion, also [where] our trade deficit is concerned.”
In the first half of this year, the US has already provided around 48% of the EU’s LNG imports, compared to Russia’s 16% of supplies.
“LNG is indeed one of the carrots; we take a lot of them, and they make good money, so this might be paired together with other things we could offer Trump, to convince him that it is better to cooperate,” one EU official said.
Other trade goods, such as agricultural products such as soybeans, could be another option.
The more obvious option would be an increase in deals to acquire strategic US military equipment and maintain openness in the European Defence Industry Programme (EDIP) eligibility criteria for US companies.
A number of EU diplomats, however, raised the question of what such a push would mean for the bloc’s efforts for increased ‘strategic autonomy’.
“Thinking about buying more arms from the US, how does that work when we try to build our own?” a second EU diplomat asked.
“And if we try to wean ourselves off dependencies, then how does that work, making ourselves even more dependent on American LNG?” they added.
Another camp in the discussion is certain EU member states, who are calling for more realism about what is and what is not needed for the bloc’s strategic autonomy.
“We need to choose our hills to die on (…) we cannot consider boots or diapers as decisive for our strategic autonomy,” a third EU diplomat said.
“We need to restrict this approach to sectors that really matter and are decisive—such as the defence sector—but not to adopt a defensive default language on everything because it will only cause unnecessary fights,” they added.
Beyond trade, there are also policy options.
“The [transatlantic] relationship will be more transactional than in the past four years,” Christoph Mikulaschek, Assistant Professor at Harvard’s Department of Government, told Euractiv.
“On Ukraine, I believe Europe is likely to offer to take on a greater share of the burden of providing aid, including funds for military aid,” Mikulaschek said.
“More generally, I expect that the incoming US administration will ask Europe to bear a greater share of the burden of collective defence; for example, NATO’s 2% guideline may well be updated—and revised upward—because the world has changed since NATO members made this commitment in 2006,” he added.
“In the end, it looks like we might have two options: pay for them to stay, meaning increase our defence spending and burden sharing so Washington remains engaged, or pay to leave, where we take responsibility for our own security so our American partners can focus on other priorities such as China,” a fourth EU diplomat said.
Another key element could be Europe’s alignment on some elements of America’s future China policy, EU diplomats said. They pointed to the fact that over the past year—Trump or not—the bloc’s language towards Beijing had already toughened.
“Still, in the end, I would not think of it as ‘an offer’ or a ‘package deal’ as it implies a prescribed set of things that are being presented at a specific point in time,” a fifth EU diplomat said, an approach that was echoed by most diplomats Euractiv spoke to.
“It is more of a conversation about elements that could be part of the discussions that EU officials and leaders could sound out with the Americans,” they added.
All of the EU diplomats Euractiv contacted, however, also cautioned Trump will be starting office in just two months, and policies will only really come after that, in response to the reality of the new EU-US relationship.
“It is good we have those thoughts early as we now have, but it is too early to be putting stuff on the table,” a sixth EU diplomat said.
“However, no one is under any illusion that we better have our act together once it is needed, and make an irresistible offer,” they added.
NO TAURUS I Germany continues to rule out the delivery of long-range Taurus missiles to Ukraine despite Washington allowing Kyiv to use its long-range weapons against Russian territory.
NO DEFENCE BONDS I Germany and Poland clashed over Polish claims that the five largest EU countries are in favour of European ‘defence bonds’ and compensating for potential losses in American support for Ukraine.
HALF-ACHIEVEMENTS I Europeans will have sent Ukraine more than one million rounds of ammunition before 2025, the EU’s outgoing top diplomat Josep Borrell said on the 1000-day anniversary of Russia’s invasion this week. Brussels is now looking at new goals, including industry-direct investment.
EPF LATEST I France is hesitating on the EU’s plans to bypass the Hungarian obstructions to reimburse member states for their military support to Ukraine via the bloc’s European Peace Facility, according to sources involved in the discussions.
PESCO REFORM I EU defence ministers approved the reform of PESCO, aiming to work with Ukraine, avoid failing projects, find cash, focus on the most critical programmes and deliver better results.
2% GOAL? | Defence spending by EU countries reaches a record high of 1.9% GDP, the European Defence Agency (EDA) said. However, collaborative work on defence remains the exception. Read our updated explainer on the EU’s key defence industry schemes and funds.
GOOD YEAR I In the race to produce large quantities, fast and European-made, the continent’s industrial sector has done well, but it still argues governments must pledge more cash to see beyond short-term needs relating to the war in Ukraine.
WHAT ELSE WE’RE READING
ON OUR RADAR NEXT WEEK
- EU chief diplomat Borrell concludes Middle East trip | Sunday, 24 November 2024 | Beirut, Lebanon
- Germany hosts defence counterparts from France, Britain, Poland and Italy | Monday, 25 November 2024 | Berlin, Germany
- G7 Foreign Ministers meet | Mo-Tue, 25-26 November 2024 | Fiuggi-Anagni, Italy
- European Parliament session | Mo-Thu, 25-28 November 2024 | Strasbourg, France
- New parliament convenes for first session after contested elections | Monday, 25 November 2024 | Tbilisi, Georgia
- Ukraine’s NATO ambassador Galibarenko meets counterparts on Russia’s hypersonic missile strike | Tuesday, 26 November 2024 | Brussels, Belgium
- European Parliament to vote on European Commission confirmation | Wednesday, 27 November 2024 | Strasbourg, France
- Nordic-Baltic Summit | Wednesday, 27 November 2024 | Hapsund, Sweden
- Global Alliance for the Implementation of the Two-State Solution working group session | Thursday, 28 November 2024 | Brussels, Belgium
- Handover between outgoing European Council President Charles Michel and incoming Antonio Costa | Friday, 29 November 2024 | Brussels, Belgium
- New European Commission, European Council President Costa and EU top diplomat Kallas take office | Sunday, 1 December 2024 | Brussels, Belgium
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[Edited by Rajnish Singh]
