Donald Trump took office a few days ago and began to implement his campaign promises, sowing panic in many countries and especially in Europeans. How much Trump scares Europeans is also evident from the discussions taking place on social networks. “We are returning to the Middle Ages,” some write, others fear that American tariffs will destroy us, many fear that the withdrawal of American forces from the hotbeds of war will whet Erdogan’s appetite, others that the planet will be destroyed because Trump is abandoning the Paris Agreement on green development. All of this has a grain of truth, but it is not certain that the consequences will be so disastrous.
If we try to decipher what Trump is trying to achieve based on what he says, we can conclude the following: Overall, his belief is that all other countries are exploiting the US without reciprocating the benefits they derive from it. In economics, he identifies which countries or groups of countries he has a trade deficit with and threatens to impose tariffs on US imports from these countries unless they start importing massive amounts of American products to balance trade with each other. The truth is that Europe has a huge trade surplus with the US, amounting to around $161 billion in 2023.
Von der Leyen reacted immediately, arguing that the EU must negotiate with the new US administration and increase its imports to avoid or limit tariffs. Things are not so simple for two reasons. Firstly, because the US has a surplus of 105 billion with the EU in the provision of services, therefore adding the two the difference is limited to 55 billion and secondly because the EU’s imports of LNG and oil from the US are already large. 46% of the EU’s LNG imports and 15% of its oil imports come from the US. They will increase of course, but the margins are not huge.
The third sector where the EU will be called upon to increase its imports is weapons. The EU imports 55% of its weapons systems from the US. However, with the equipment needs that Europe has identified, there is significant scope for increasing imports of American weapons. And they will increase. Ultimately, judging by the numbers, perhaps the situation is not as tragic as described and a compromise can be found to limit tariffs on European products.
Of course, increasing imports from the US requires money, which the EU is forced to spend anyway. And this is because, having realized the need to strengthen its defense, it has already decided to spend a lot of money. Consequently, a large part of these funds will go to the US.
Trump’s announcements that the US will stop intervening in wars that are not “theirs” are probably part of the same economic logic. He is pressuring the EU to increase its defense spending by buying American weapons. And this means that as long as Europeans import American weapons and the trade deficit with the US is closed, European wars will once again become “theirs”.
So perhaps the EU will not face any particular problem with Trump if it listens carefully to what the US president is asking for. And what he is asking for is not unfounded, but he is formulating it inelegantly, escaping diplomatic elegance. Until now, US interventions in various military conflicts have been carried out under the pretext of strengthening democracy in these regions, protecting human rights, protecting the Western way of life. That was the pretext. Now they will be carried out on the basis of money, just like before, but without a pretext.
Trump’s demands on a geopolitical level are also formulated very bluntly, as in the case of Greenland, Canada and Panama. Not even Hitler formulated his demands in such a way. But Trump is a businessman and a great negotiator. He terrorizes the opponent with his demands and threats before the negotiation begins. And that is what he is going to do for everything, negotiations, but starting from the strengthened position that the “madman” has. No one can find a way out with the “madman”, except that Trump is not crazy, he takes extreme positions to strengthen his negotiating position.
Therefore, negotiations will begin not to buy or occupy Greenland, not to integrate Canada into the US, nor to eliminate Panama, but to increase the exploitation of Greenland by the US and increase US profits from Canada. In the case of small Panama, it is not excluded that an integration agreement will be concluded with the US. However, whatever happens will be the result of tough negotiations.
With China, negotiations may not go well, and this is because while Trump has a limited time horizon (midterm elections in 2 years and age), China does not have such problems, has no elections or political costs, and can negotiate forever without rushing.
As for green development and the US abandoning the Paris Agreement on the environment (again), it may even benefit Europeans. The EU has decided to eliminate fuel use and pollutants and switch exclusively to alternative energy sources. However, green development costs billions to Europeans, consumers and industries, on the one hand through taxation, on the other through production costs. And there are many who argue with good reason that this entire European agenda is excessive, since the E.U. in total produces 2% of global pollutants.
So eliminating this 2% if everyone else, India, China, the U.S. and the rest of the world, pollutes without restraint, is ultimately not enough to save the planet. The E.U. now has an opportunity to review its environmental policy not by abandoning it, but by slowing it down in order to limit its costs. Because if increased defense spending is added to this cost, the bill does not add up.
All of this is a scenario and is based on the assumption that Trump is not the madman who will destroy the world, but an inelegant and tough negotiator. If he ultimately turns out to be insane, the scenario changes.
