February 7, 2025 - 7:00am
As Europe waits for US President Donald Trump’s tariffs, the European Union does not necessarily need to lie down and take it.
Some say that Donald Trump only cares about the optics; that he would accept any deal as long as it makes him look good. If one accepts that idea, it’s essentially an argument for continuing to underestimate him — and that has not worked so well in the past. In particular it would be a foolish misjudgement to equate America’s relationship with Mexico and Canada to that with the EU, and to extrapolate.
Here is how Europe could respond more effectively than through straight-forward retaliation. The most aggressive, and potentially also the most effective response, would be for the EU to revive Angela Merkel’s and Emmanuel Macron’s China Investment Agreement from five years ago, and to reaffirm the strategic partnership between the EU and China. That would probably create a bit of noise on the other side of the Atlantic, and would almost surely be accompanied by further threats. Should Trump choose to escalate, we should probably help ASML find business opportunities in China, maybe as a quid pro quo for Huawei helping us with our lagging 5G infrastructure. A co-operation agreement could extend to AI, an area that Europe has sadly neglected.
A less belligerent, but quite effective, response in the long run would be to fill the voids left open by the unwinding of some of the USAID programmes. To the extent that the US withdraws from international organisations, the EU could step up its involvement to form new strategic partnerships, especially in Africa and Latin America.
Internally, the most important response should be to address the deep causes of our dependency on the US, like our reliance on the US military for our security. Maybe we should switch from producing cars at scale to producing tanks and military aircraft. We should seek efficiency gains through reductions in the number of weapons systems and pooling of defence purchases, with a buy-European mandate.
Our commercial trade surpluses with the US reflect imbalances of domestic savings over investments. The capital markets union is the proverbial number ten bullet point on any EU politicians to-do-list. Put it right at the top, above Ukraine, above the Green Deal, because without it, there will not be enough money to go around for anything.
Deregulate the European tech sector, but maintain the current intrusive regime for imported tech services, to give global tech companies incentives to comply with European laws. Switch from data protection to data security. The overall point is that there is a menu of effective responses, but they all require unity, and a bit of gumption.
The worst thing — which is unfortunately what I expect to happen — would be a tit-for-tat trade war. The EU cannot win it. Do not repeat the mistakes by the Brexit doomsayers, who predicted that the UK would end in a massive black hole. It is the surplus countries that have more to lose from a trade war.
One of the lessons from history’s great military strategists is not to engage in your opponent’s war, but conduct your own. Don’t fall for Trump’s provocations. If the tariffs are wrong for the US, as I believe they are, they are wrong for Europe too. We need to play our own game.
This is an edited version of an article which originally appeared in the Eurointelligence newsletter.
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SubscribeSounds like a very risky strategy for the EU to adopt. If you want the US to leave NATO, then cosying up to China will probably achieve that quite quickly. The author should also note that the EU is not “Europe”, and should never be referred to in this way.
Hasn’t Trump threatened to leave NATO numerous times anyway? If so why not simply call his bluff.
For all Americas power, it still needs allies. Something Trump doesn’t seem to understand
I don’t understand it either. What use will Germany be in a world of disorder? Germany’s only threat is to stop sending cars to America and that’s hardly a threat. And Greece could stop American tourists having holidays. And Austria could stop skiing holidays. Not to mention Czechia, which could ban stag nights.
This was funny.
But when an ally becomes burdensome who needs it?
The US will likely never leave NATO because NATO is their tool, let’s not pretend otherwise. Even if they did, then only to cut the deadweight loose, though I’m not holding my breath on that.
The EU has destroyed it’s own prospects for an autonomous foreign policy by following the US into the Ukraine quagmire (because that is what it has become for the EU, regardless of the merits of the intervention itself) and for which it has nothing to show but another hole in the budget (Blackrock mopped up what little economic spoils there might be if you’re wondering).
Now it’s about to be bent over a barrel by Trump as a reward for their obsequiousness. On some level, I’ll enjoy watching them squirm, but that doesn’t make up for falling living standards if we’re being honest.
So I’m not sure this pivot to China could work, but blindly stumbling after the Americans isn’t working. The dolts at the commission might as well be ‘Muricas sleeper agents considering what they’ve done over the last 5 years. The Americans are looking out for themselves, the EU should too.
P.S. Im totally with you on the last point.
i suspect you are right that they wouldn’t leave completely. They may just reduce their $ contribution ….
When you talk of playing ‘our game’ it implies that ‘Europe’ or indeed the EU can speak as one and therein the fundamental conflict of self-interest among European states. The EU deceives itself by pretending there is a united European entity and therein the biggest obstacle to framing an effective response. The longer the myth is maintained the harder it will be to come to terms with reality.
The EU exists as a group of people in suits, discussing something they can’t control. It is not a federation. As soon as individual nations suffer, the people there will cease to be European. Europe does not exist in the same way as China, the USA and Russia.
… except in the minds of a few Lib Dems.
Get the basics right first Unherd.
Europe is not the EU. The EU is not Europe.
What a dismal, unprofessional rag you are.
Please do point us to your examples of higher quality journalism then.
UnHerd seems to me to be at the higher end of the quality spectrum, but I’m clearly missing something.
For me Unherd is a mess and very representative of the feebleness and cowardice of UK media in general.
Can you not get a refund?
And compensation for wasted time?
Trump would suggest a lawsuit for that.
If anyone wants to join me in a class action let me know here.
No thanks, I’m very happy with UnHerd.
I’m still waiting for your suggestions of better alternatives. I feel sure you’ve got some you’re hiding from us !
The Spectator then. But I unsubscribed when Gove took over there.
And yet you continue to come here, day after day after day, repeating the same boring nonsense. What a wasted life!
Not at all. It is good to clarify one’s thoughts and put them in order and down on paper.
You’re not missing anything PB; he’s flashing his knickers for us all to see, then telling us “not to look”.
Can you not see the stupidity of a writer saying ‘our commercial trade surpluses’ is an oxymoron in a UK based media outlet?
We are paying for this nonsense.
Your editorial policy is a mess. Sort yourself out
It is people like RL that UnHerd readers should cherish! You don’t have to respond – you know what to expect in return, something worthless and often unreadable.
By not concentrating on UK’s problems, not even naming them in this rag, how can they ever be resolved?
Put the UK first. Get some writers from rhe Right to propose solutions, practical steps to take. You are not a Starmer-Hermer puppet who prioritises other countries interests over ours. Or are you?
“…The overall point is that there is a menu of effective responses, but they all require unity, and a bit of gumption…”
Errrrm… Gumption.
Yeah, sure.
https://youtu.be/axXaBO223RI?si=A5868OZZQbJvMXbj
Maybe we should switch from producing cars at scale to producing tanks and military aircraft.
That’s really not a good idea. Joining an arms race is what got us into WW1. Much better to make it clear that anyone who attacks us will immediately be nuked. Then they’ll leave us alone.
Excellent recommendations, but asking for the responses the author asks for is not realistic, because the people who currently govern Europe and the UK (and a sizable proportion of the populace don’t forget) have too much invested in their past stances to be able to change direction – to even actually see the need. Consequently all their actions going forward will all be… reactions.
It’s like asking a group of hindoos who has been going to the temple for thirty years to become atheists, because you now have proof that hindoos five thousand years ago did not have aeroplanes but were in fact living in mud huts – the (unconscious) sunk cost of your buy-in into the religion means very, very few people can actually see that the buy-in into nonsense is actually hurting you. There is no way round this problem except on the other side of penury.
Did you mean the EU when you said Europe ?
The Chagos Island 100 billion pound give away scandal deepens and deepens. All Starmer’s friends and colleagues are up to their necks in it.
Not a peep about this in Unherd (StarmerLies).
“It is the surplus countries that have more to lose from a trade war.”
Europe has a very large surplus with the US, so I’m confused what the author is proposing. Surely the EU should look to balance its trade with developed western countries, which I believe, is what Trump is trying to achieve.
Boris ate a sandwich too close to someone, uproar in the media, and he was removed as PM and then barred from being an MP.
Starmer and friends act against British interests and laud themselves doing just that and not a peep from Unherd. What is going on?
To be clear and because you won’t read about this in Unherd. Hermer said in a recent speech he would welcome any international legal judgement that found against UK and he would act on it. Hermer who recently said the British Empire was wholly racist, in all its aspects.
Starmer and Herner are doing exactly this with regard to the Chagos Islands. Why is this not reported here?
We have a UK government that is acting against UK interests and justifying doing just that. It is without precedence in our history.
Unherd you cannot stay silent on this.
They are despicable! But perhaps things need to get worse before they get better. If Ted Heath had won re-election in 1974, there would have been no Maggie. Let these anti-British zealots do their worst, it will only give Reform a bigger majority and mandate in 2029 (see the utter destruction of the Dems in the states).
At some point there would have been a Maggie, because Heath was utterly inept. (Not quite as inept as T May, but damn close.) Or we would be Brussels Province 9 (in Receivership)
“Hey perhaps we’ll have to get a piece on Chagos.
– Starmer said no.
But the scandal is growing.
– Ok. Get Cottee onto it. The Chagos Islands aren’t Islands and they aren’t ours.
Sweet.”
More China is suicidal.
Yes, tariffs are wrong for Europe too, but the EU is built upon tariffs. Doh!
Encouraging the EU to turn towards China doesn’t sound that smart. It would just give Trump the justification to call Europe’s bluff and give the USA a reason to back away from NATO- which many American would like to do anyway.
If China was a democracy I might agree. But to put advanced technology in the hands of an authoritarian government is a recipe for disaster in my opinion.
Similarly if the EU isolates itself from America, what of Europe’s imported fossil fuel dependencies since there is no way renewable energy is going to power increased domestic production.
Consequently, nuclear power is an absolute must for Europe if it is to bargain with the devil.
The reality is that global growth is stagnating because of the diminishing energy returns from energy invested. With increasing amounts of energy required to mine, extract, process the raw materials for energy production, less energy is available to the general economy. Thus AI and energy intensive data centres are dead on the ground without a revolution in energy production.
https://royalsocietypublishing.org/doi/10.1098/rsta.2022.0290#:~:text=Odum%20and%20Pinkerton%20agreed%20that,continuing%20uncertainties%2C%20research%20and%20applications.
In this respect, the demise of the EU is a direct product of incompetent energy policy which has resulted in much of Europe’s heavy industry exported abroad to BRICS aligned States.
Energy has to be the number one consideration both nationally and globally with perhaps the EU or Europe leading the way for a global treaty on energy production.
Trump will probably target individual countries in Europe with selective tariffs. That’ll put the cat amongst the pigeons.
He might even offer the EU Commission a chance to choose between a major French product or a German product to receive the tariff. That would be fun to watch …
Ludicrous. The EU leadership is clueless, inept, and they couldn’t lead 2 people out of an elevator. However, this did provide morning chuckles over breakfast!
Russia is not our enemy. China is not our enemy. However, those that argue that the United States of America is our friend and argue that more spending on weaponry is necessary are, most certainly, our enemy.
‘To be an enemy of the US can be dangerous, but to be a friend is fatal’. H Kissenger