USA: Trump threats to increase tariffs against European products and possible EU responses

The redefining of the American democracy and the elimination of a world order based on rules could be brought by it, immediately after taking over their presidency, according to the German press estimates. Europe is concerned, notes Handelsblatt, as Trump still has a ‘scor’ to settle with Germany and the EU and this is no more than the US trade deficit, at the same time that France has a weak government and Germany has… no government, at least until the 23 February elections. CORVERSE However, regardless of whether the government in France will be viable and which government will be formed in Germany, it is a question of whether there will be a single EU response to the challenges posed by the second term Trump at the White House. Behind Trump is the concentrated power of Corporate America, united and ready to launch the “Trump Revolution” – a “free – authoritarian” project that will redefine and, according to some analysts, undermine American democracy. In terms of foreign policy, it aims to eliminate the latest remnants of a world order based on rules. The Trump presidency’s profile is expected to be authoritarian in relation to internal policy, unilateral in foreign policy. The sure thing is that the new president will have a “excessive start with many decrees”, as Chicago economic historian Jonathan Levy argues. The author of the book “Ages of American Capitalism” sees the western leadership already in a “grey zone between democracy and autocracy”. CORVERSE Trump’s recent neo-imperialist reflexes, claiming Greenland and the Panama Canal and wanting to make Canada the 51st federal state, are particularly worrying about Europe. Berlin’s political scientist, Henfried Menkler (Herfried Münkler) sees this as “clear steps towards the dissolution of the West as a transatlantic community”. Trump defines “closer areas of influence and spheres of interest that allow the US to reduce their presence in Europe without becoming too vulnerable in terms of security policy,” Menkler told Handelsblatt, adding that “the West after 1945 was a geostrategic reaction to the fact that the US leaving Europe after 1918 had left a security gap that no one wanted to risk again after the Second World War.” However, now the US is retiring from Europe once again, Menkler explains. So Washington is looking for “simplified defence rings” – Greenland – “so that it can turn to the Indo – Pacific”. These expansion fantasies are accompanied by attacks on the world trade class. The President-elect has announced flat-rate increases from 10% to 20% in all imports from abroad. Even free trade partners, Canada and Mexico, are unlikely to escape, while rival China will be punished with tariffs of at least 60%. All these are partly threats, in order to blackmail concessions, for example from Europeans, of which Trump expects drastically higher defence spending: 5% of economic power, twice as much as previously agreed in NATO. Trump’s attacks on the transatlantic partner could still be tolerated if there were something like a strategic concept among Europeans. But there is a power gap on the continent, as French President Emmanuel Macron has no majority in parliament, nor does German Chancellor Olaf Solz. The strongest EU leader is currently ruling in Rome. Europe’s hopes are based on Giorgia Meloni and Fratelli d’Italia’s postfascist party, notes Handelsblatt. Moreover, the EU and particularly its largest economy, Germany, is experiencing a deep economic crisis. Germany, the industrial centre of Europe, is the main victim of the American conflict strategy, according to a study by the Kiel Institute for the World Economy. The loss of competitiveness, Russian aggression in Ukraine, the seemingly unstoppable rise of nationalist parties such as AfD in Germany and FPÖ in Austria – all of this undermines European unity. In Brussels, there is still optimism. “I can’t imagine Trump playing us against each other,” EU foreign policy chief Kaya Callas says in an interview with Handelsblatt. 1. Musk and Trump – the dual leadership of libertarian-authoritarian “global revolution” Elon Musk and Donald Trump – they are the libertarian-authoritarian group of American politics, notes Handelsblatt. Musk is a libertarian innovative and quite visionary businessman, 53 years old, who has achieved a total fortune of over $400 billion with his companies such as Tesla and SpaceX, but also with the electronic platform X, former Twitter. Trump is a former, real estate businessman and multiple bankrupt, 78 years old, at the height of his power. Musk not only invested a quarter of a billion dollars in Trump’s campaign, but helped shape the campaign and spread Trump’s messages millions of times. The billionaire shakes politics at national and international level. However, the question remains how stable the relationship between him and Trump – and, above all, who has the last word. Anthony Scaramucci, who was fired from a position of White House representative in 2017, after ten days in power, recently made it clear on his podcast “The rest is politics”: “Trump hates when they steal his show. For example, he always took care to put his news on top of the New York Post front page. “If suddenly there is an article saying that Musk is head of government, he will leave very quickly,” Scaramucci is convinced. Former German ambassador to Washington, Peter Wittig, sees a crucial difference between the first and second term Trump: This time he is prepared, his team is “faithful”, although “in no case homogeneous”. “Ideologists Trumpists MAGA, pragmatic conservatives and tech consultants” competed for the president’s favor. There will be a war of trenches, especially on sensitive issues such as migration, trade and politics for China. Only one thing is clear: “In the end, the unpredictable president will decide”. In order not to face closed doors in Washington in the future, even once again leaders of progressive technology, such as Amazon founder, Jeff Bezos, Google CEO, Sundar Pichai (Sundar Pichai) and, above all, Meta’s head, Mark Zugerberg (Mark Zuckerberg), adapted to the new sound – and supported the whole thing with submission gestures. So Pichai is doing his best to suddenly portray himself and his essentially liberal company as apolitical. He tried to suppress the election talks between his staff. Bezos banned a recommendation for Kamala Harris in the “Washington Post” newspaper as well as a critical caricature of Trump. Bezos’ motives are easily understood. For Blue Origin’s space company, state contracts are urgently at stake. After all, NASA’s new boss, Jared Isaacman, is considered to be trusted by Bezos’ missile rival, Musk, who now hopes in an explosion for his own SpaceX company. Recently, Amazon and Meta introduced so-called diversity initiatives designed to protect black employees or homosexuals from internal discrimination. This added praise calls, dinners at Mar-a-Lago and seven-digit donations to celebrate Trump’s inauguration. Last week, Zuckerberg publicly announced through video flow that he would stop checking and protecting minorities on Facebook and Instagram platforms, supposedly in the name of “free speech”. He had long portrayed controls as a cornerstone of the company’s purpose. Zuckerberg also adopted Trump’s phrase, criticizing the “old media” and distanceing himself from the “waking” couple. The greatest gratitude was not possible. As the New York Times reported, workers spoke internally of shame, which allegedly escalated into disgust in some cases. It’s not just the Silicon Valley elite that’s changing. Wall Street also complies. A few weeks before the opening, the largest American bank, JP Morgan, left the “Net Zero Banking Alliance” (NZBA), which aimed to align the financial system with the green transformation. There was rarely such unity in Corporate America. Companies will contribute significantly to ensuring that Trump and Musk can carry their libertarian – authoritarian cultural war to the world, especially in Europe, Handelsblatt says. 2. Germany and Europe are the main victims of the American Revolution Trump and his team are feeding a deep dissatisfaction against Germany, fueled by the arrogant behavior of the Merkel government. Future Foreign Minister Rubio, in fact, is a beacon of hope for Europe in the cabinet because he supports NATO. Trump had already criticised the German – Russian gas pipeline Nord Stream 2 in a speech to the United Nations in 2018. But Trump was “a hundred percent right” that Germany’s dependence on Russian energy had weakened its deterrent power over Russia. This realization was now accepted by the federal government. In Helsinki, German Chancellor Olaf Scholz said things like: “I’m also sure we’ll continue to act together The decisive question about the transatlantic relationship will be how Trump will approach Ukraine.” He has retreated from his unrealistic election promise to end the war within 24 hours of taking office. A meeting with Kremlin ruler Vladimir Putin is supposed to resolve the issue now. “We must put this war behind us,” Trump said this week. But how? Putin has little reason to give up his aggression. On the Ukrainian side, morale collapses. American General Robert Kagan warns that the lines of the defending Ukrainians could collapse this year and the Russians could pave the way for Kiev. The Kremlin governor would eventually have achieved his war goal and could have eliminated Ukraine from the map. “Vladimir Putin is not interested in a solution through negotiations that leaves Ukraine intact as a sovereign state,” writes Kagan. Not all experts share Kagan’s pessimism. The Russians are also becoming increasingly exhausted, militarily and economically. So maybe there’s finally room for negotiations. Trump’s foreign policy motto is “peace through power” – a reference to Ronald Reagan. Trump already counts as a success the planned release of Hamas hostages, part of the agreement between Israelis and Palestinians. The deal is “only the beginning of the great things that come for America and the world,” he said. But many Europeans remain skeptical. The dominant concern is that “peace through power” is simply an empty phrase and that a hasty agreement with the Kremlin will be at the expense of Ukraine. This fear leads back to the presidential palace in Helsinki. Trump and Putin met there in 2018, long before the Ukraine war. The summit had a clear winner. It was Putin. Trump was unprepared, pleasant and inferior to Putin in every respect. Europeans are now relatively nervous. Will Trump exert greater pressure on Ukraine than on Russia and further fuel the Kremlin’s imperial desires with his own expansionist plans? In fact, European time should now have struck. A united and determined Europe would be strong enough to negotiate on equal terms with Trump and Putin. But such a Europe does not exist. France moves from one short-term government to another. What about Salts? His internal political situation is so fragile that he is missing in Washington even when he criticizes Trump’s territorial claims in Greenland and Panama. From the point of view of the Chancellor, it is clear that Germany will have the leading role in Europe. And Trump will take Germany seriously only if it is not covered, but is brave enough to resist him, notes Handelsblatt. While the other EU heads of government disappear, the Chancellor admonishes the future president: “The principle of inviolability of borders applies to each country, regardless of whether it is to our east or west”. There’ll probably be a lot of friction in the next few weeks. Because Trump has another score to settle with Germany and Europe. 3. What is the right strategy for dealing with Trump? At EUR 200 billion per year – in Trump’s view – it is the amount of damage to the US, due to their trade deficit with the EU. The Republican sees the US trade deficit with Europe as an unbearable challenge, a complaint to be corrected by customs duties. “The announcement of giant tariffs is certainly also a threat and a tactic of concluding agreements,” says former Ambassador Vittingx. “But belief in the magical effect of tariffs has always been Trump’s basic belief and Brussels should now quickly come into contact with key government figures – not complain and lecture, but with offers for commercial arrangements.” “Trump likes interpersonal diplomacy,” confirms Gordon Sodland, former Trump ambassador to the EU in Brussels. She advises that the President of the European Commission Ursula von der Leien should come to Washington without escort: “He should come here and sit with Trump without an agenda and propose very specific things that the US and the EU can do immediately, not in ten years, not in a year, not in five years, but tomorrow.” But for this to happen, Europe, with its many voices, must know what it really wants to achieve. At present, it is characterized by more discord, particularly due to Germany and France. While Germany, for example, would be willing to allow more American agricultural products in the EU to appease Trump in a trade agreement, France insists on protecting its farmers. Paris and Berlin have similar opposition to the issue of arms. Germany orders from the US, France insists on the principle of ‘European money for European arms companies’. In Brussels, the EU Commission has prepared the best it can. A secret group that unofficially calls itself “Trump Task Force” has developed strategies to respond to the most likely scenarios. Officials expect Trump to impose punitive duties in the first week. The Commission considers that a duty of 10% from the US could cause EU exports to collapse by EUR 150 billion. Officials have prepared a list of anti-invoicing. They want to fight back immediately to bring the president to the negotiating table as soon as possible. And unlike the last trade war in Trump’s previous presidency, the EU will not respond with small retaliation duties. Trump sees deescalation only as weakness. “This time, the shooting will take place first and the questions will be done later,” summarizes one of the case’s knowledgeers. In theory, the EU, with its large internal market, has great negotiating power – but this only works if there is unity. “If each government individually runs to Washington and begs for an agreement with Trump to save its own industry at the expense of others, then our defense will completely collapse,” says a senior member of the Commission. But that’s exactly what we’re afraid of. When Trump threatened with punitive tariffs on European steel and aluminium in 2018, the German government under Angela Merkel tried to negotiate alone with the United States. The then Finance Minister, Peter Altmeyer, traveled to Washington especially to meet with Trump’s ministers – anyway Trump imposed the tariffs. And this time, not only Germany and France have weakened, but Trump also has two potential allies within the EU, Victor Orban and Georgia Meloni. The second draft of Brussels is valid or also falls with the support of the other EU capitals. To escape the destructive dynamics of the trade war, the EU wants to offer Trump an agreement: Europe will take more responsibility for defence, re-arm and cover America’s back in Ukraine, so that the US will focus on China. In return, Trump renounces the trade war. But defence expenditure remains a national responsibility in Europe. And Solz so far has been firmly refusing to discuss EU defence bonds, which could make it easier for Member States to raise money together for their defence. Another tool to put pressure on Washington is EU regulation for US digital companies. Musk, for example, faces a fine of up to six percent of the turnover of his entire empire – that would be billions of euros. Senior officials involved in the preparations for the trade war expect Trump to demand that the EU suspend procedures against American technological colossae during the trade war. China’s policy could also play a role in negotiations with the US. Because this is where Trump needs support. His Foreign Minister calls on Europe to support a tough line against Beijing. Many in Washington share the view that Germany shows the same naivety in its dealings with China as it has long shown with Russia. Even former government advisers Biden are said to be “disappointed” by how little the Federal Republic has distanced itself from China and how dependent the German economy is still on the Chinese market. In Brussels, there is certainly a willingness to take a much more aggressive course towards Beijing. Here too, when Europeans reach agreement on the China issue, this will also strengthen their negotiating power over Washington. 4. Almost no access to Trump people “When Trump looks at Germany, he is deeply influenced by his interactions with Angela Merkel,” says Ken Weinstein, a consultant to the first Trump administration. “Sees Germany as a country exploiting the United States in the fields of trade, security and interactions with China”. Some see a new federal government as an opportunity for a logical transatlantic relationship. How can this be achieved? “It is very important that the next chancellor be able to present a single person to President Trump and look strong,” Weinstein points out. “Trump doesn’t believe in things as usual and will clear it up”. A look at the guest list for the inauguration ceremony Monday shows how difficult the situation for Europeans as a whole is. Trump invited many heads of state and government to the ceremony: Argentine President Javier Millay wants to come, Italy Prime Minister Meloni is invited, as is Hungarian Prime Minister Victor Orban and China State and Party Leader Shi Jinping. Moderate Europeans such as Salts, British Prime Minister Kir Starmer or French President Emmanuel Macron are nowhere on the list. This is also a signal, concludes the relevant publication.