Future of US-EU Relations: ‘Yes, He Can’

Written by | Wednesday, December 28th, 2016
European Values

Andrea Renda (Centre for European Policy Studies)

Although only a few weeks ago Hillary Clinton’s victory in the November presidential elections seemed all but self-evident, Donald Trump eventually won and will thus become the 45th President of the United States of America. Today, this historic result is being explained by the fact that the media took Trump “literally, but not seriously,” while his voters took him “seriously, but not literally.” Now, it is about time to focus on what Trump’s victory will mean, based on his pre-election promises, for the United States, Europe and the rest of the world.

On the domestic front, the new administration is likely to seek partial annulment of the legislation adopted under Barack Obama. Trump will try to replace the so-called Obamacare, which is meant to provide accessible health care. We can also assume a substantial weakening of the environmental legislation eg. by reducing the powers of the US Environmental Protection Agency (EPA). Moreover, we cannot exclude that the US will withdraw from the Paris COP21 climate agreement. The key initiative of the new administration will be to mobilize traditional American industries, eg. steel industry, protect jobs and streamline productivity. A massive investment plan in transport infrastructure, schools and hospitals is also expected.

Trump’s trade policy will evolve towards economic self-sufficiency. The main point will be the effort to fundamentally modify the NAFTA in order to prevent US companies from relocating to Mexico in search of cheaper labor. The fate of the trade agreements such as TPP and mainly TTIP will be even less certain under President Trump than before. European countries will undoubtedly be affected by this policy of protectionism. Europe can greatly suffer from a slowdown in world trade, which could lead to the revival of protectionism. Regarding security, if the United States really curtails its activities within NATO, European countries will have to increase their defense spending and assume more responsibility for their own security. Trump’s victory is also politically dangerous for the EU, as it adds further impetus to populist movements, especially in the countries that are awaiting elections next year.

The Trump presidency and his economic proposals will be inefficient and harmful to the American economy. Dramatic effects will, however, be reflected in global governance and security, and even more in the future and stability of specific regions, such as Europe and the Middle East. The scope of these negative externalities will be even more evident when Trump substantiates his plans and introduces his appointees for key positions in the new administration.

(The study can be downloaded here)

 

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