Europe should prepare for possible threats to its economy if Donald Trump returns to the White House, the president of the European Central Bank (ECB), Christine Lagarde, warned again.
“Judging from the previous years that Mr. Trump was president of the United States, there may be threats and issues that Europeans should be prepared for,” he said in an interview with CNN.
“Let’s prepare for possible tariffs, for possible tough decisions that would be unexpected. Let’s be strong.”
The European economy of 16 trillion. dollars, is largely dependent on trade with the United States. The transatlantic relationship has been strained during the Republican’s first term, largely because of the trade dispute between Washington and Brussels. That dispute led the United States to impose tariffs on EU steel and aluminum, to which Europe responded with tariffs on $3 billion worth of US goods, including whiskey, motorcycles and jeans.
Europe should prepare for possible threats to its economy if Donald Trump returns to the White House, the president of the European Central Bank (ECB), Christine Lagarde, warned again.
“Judging from the previous years that Mr. Trump was president of the United States, there may be threats and issues that Europeans should be prepared for,” he said in an interview with CNN. “Let’s prepare for possible tariffs, for possible tough decisions that would be unexpected. Let’s be strong.”
The European economy of 16 trillion. dollars, is largely dependent on trade with the United States. The transatlantic relationship has been strained during the Republican’s first term, largely because of the trade dispute between Washington and Brussels. That dispute led the United States to impose tariffs on EU steel and aluminum, to which Europe responded with tariffs on $3 billion worth of US goods, including whiskey, motorcycles and jeans.
The elites of the Great Reset are frightened by the return to power of Trump in the USA
The members of the elite of the Great Reset appeared at the World Economic Forum in Davos, both worried and panicked. Klaus Schwab’s friends gathered from January 15 to 19, 2024, with two words monopolizing the conversation: Donald Trump. But, let’s start from the beginning:
The members of the elite of the Great Reset appeared at the World Economic Forum in Davos, from worried to panicked. Klaus Schwab’s friends gathered from January 15 to 19, 2024, with two words monopolizing the conversation: Donald Trump. But, let’s start from the beginning:
- Chinese officials now participate only in small numbers, fearing they may deviate from Communist Party doctrine.
- Russia’s oligarchs have been kicked out of the magic mountain.
- Both imposing India and Saudi Arabia see a multipolar world full of opportunity.
- In any case, it was all overshadowed by the possibility of Donald Trump returning to power – an eventuality that looks increasingly likely after the former president’s victory in Iowa on January 15 and Ron de Santis’ withdrawal from the Republican race on January 21 .
- Foreign governments “are freaking out about what they see on social media about American democracy,” a US lawmaker confides.
- The US presidential election is only ten months away, and the world is starting to prepare for a second Trump presidency.
- Markets expect tariffs, the exit of Ukraine and Taiwan, a trade-off approach with other allies and heightened foreign policy rhetoric.
- And while the changes of governments at the level of international relations raise discontinuities, e.g. Richard Nixon went to China and Ronald Reagan told the Soviet Union to tear down the Berlin Wall, the transition from a Biden administration to a Trump administration would be particularly large because of the gap between their political positions and the chaotic world conditions in which a change would take place, with the proliferation of wars.
- According to the Oslo Peace Research Institute, the number of interstate conflicts, more than 50, is close to the highest level since 1946.
- The Biden administration tried to reinvent America… as a superpower – turning things upside down.
- The “accomplishments” of this approach include the re-galvanization of alliances in Asia and the war in Ukraine.
- Result: Global turmoil has intensified and the world order is sinking into decline. Americans themselves are feeling fatigued and Trump is reasonably catching up.
Plan B
Thus, governments around the world are developing alternative plans for a Trump-led America. A second Trump presidency would be different from the first both because the world is dirtier and because Trump will not tolerate his agenda not being implemented.
- A horizontal 10% tariff is likely, as is the severance of “trade relations” with China, resulting in even higher levies than exist today.
- On the other hand, for some politicians and countries, with whom Trump is ideologically aligned, his presidency would be good news.
- In Israel, Benjamin Netanyahu, if he remains in power until 2025, could expect support and rejection of Palestinian aspirations.
- Soulmates like Viktor Orban in Hungary will receive a warm welcome in the Oval Office.
- Trump has good feelings for Saudi Arabia and its de facto leader and successor, Mohamed bin Salman.
- But Naredra Modi, the Prime Minister of India, also has strong relations with Trump.
In this case it is worth saying that Trump’s style and personality make predictions difficult. However, it is possible, and probably essential, to try to outline what this future American president’s approach might be to those he may consider “users” (ungrateful allies), “bruisers” (despicable adversaries), and “losers.”
What about those Trump calls Users (ungrateful allies)?
- Most allies will be seen as users: They should expect non-emotional treatment.
- An assessment of the extent to which they “burden” the US, for example through a trade imbalance or because they spend paltry sums on their armed forces, is forthcoming.
- Control can get awkward…
- It is pointed out that Germany’s defense spending is set to soar after the creation of a special military fund of 109 billion dollars, so protecting the country is no longer free.
- It has also replaced Russian gas by importing liquefied natural gas, much of which it bought from American suppliers.
- Users who do not adapt to the new reality may find themselves under pressure.
- They will face tariffs or lose their safety guarantees.
- France, for its part, impressed Trump with a military parade on Bastille Day.
- Britain offered a state visit involving the late Queen.
- Taiwan, for its size, runs a large trade surplus with the US of $45 billion between January and November 2023.
- Although it has increased defense spending to 2.5% of GDP, it still relies on the massive US military presence in Asia to deter a possible invasion by China.
- And even though he elected a president who defies China, he may withdraw aid…
- Last year he complained that Taiwan “took away our business”.
- The other vulnerable ally is Ukraine.
- Objectively American support to Ukraine is a great deal…
- With cumulative US aid for the war below 10% of the annual US defense budget and no American casualties, America is tying Putin’s military and hurting the Russian economy.
- Most of the money spent on weapons for Ukraine remains in America.
- However, Trump sees the war as a drain on American resources, so he will try to pressure Ukraine into a peace deal with Russia.
- Abandoning Taiwan and Ukraine will change the world…
- A top European Union official recently claimed that in 2020 Trump told Ursula von der Leyen, head of the EU Commission, that America would not help Europe if the continent was attacked, adding: “By the way, NATO is dead and will leave, we will leave NATO”.
The enemies of the state (those Trump calls bruisers)
- Think back to 2019, when the former US president threatened to incinerate North Korea.
- Among the bruisers is Russia, which is eyeing friendlier treatment given Trump’s admiration for Putin.
- China will have lower expectations as previous negotiations have disappointed while there is mutual hostility.
- During the first Trump administration, Iran faced “maximum pressure” sanctions.
- Also, the US and Israel assassinated Qassem Suleiman, the top strategic commander of the Revolutionary Guards.
- On the other hand, Trump did not respond to Iran when it attacked Saudi Arabia’s oil facilities.
- The most likely outcome now, given the chaos Iran is causing in the Middle East, is aggressive sanctions on the Tehran regime, which may be tempted to continue its proxy wars throughout the region.
- Trump’s bruising approach is troubling, which creates opportunities: it is conceivable, for example, that he might try to lure Iran and its proxies into a regional peace deal.
- “My biggest fear is that Putin and Xi are much smarter than Trump,” says one European official.
And all the others (those Trump calls losers)
The third group of countries is the largest: places that are neither close US allies nor rivals. Trump could write them off as losers. The Biden administration has faced more aggressive behavior from America’s enemies in Europe and the Middle East, but has remained selective in its use of force. The withdrawal from Afghanistan proved the same. Now, conflicts in places America cares little about have flared up, including the civil war in Sudan. And so it will be in the future, with Trump choosing the way of America… for America.
