Steve Stillman is a Professor of Economics at the Free University of Bozen-Bolzano.
The return of Donald Trump will have major ramifications for Europe. Populist leaders can expect increased support and multinational institutions might be abandoned. Only time will tell if this is an opportunity for Europe to embrace its own path.
It has happened! Donald Trump has been elected again as President of the United States. Trump’s presidency from 2017 to 2021 reshaped America’s relationship with it allies. His second term is likely to have serious consequences for Europe. His victory will likely open up new opportunities for European leaders who are sympathetic to Trump’s brand of nationalism and skepticism toward multilateralism, but it will also provide significant challenges for Europe more generally.
Trump’s Economic Policies and Their Ripple Effects
Trump’s approach to trade, economic nationalism, and protectionism left a deep imprint on the economic relationship between the US and Europe. His “America First” strategy reshaped the transatlantic economic landscape, primarily through his disdain for multilateral trade agreements and his willingness to impose tariffs unilaterally, including on European allies.
Under Trump, tariffs became a tool not only for protecting American industries but for geopolitical leverage. His administration imposed tariffs on European steel and aluminum, citing national security concerns, and threatened auto tariffs that were only narrowly averted. It is likely that his new administration will resume its protectionist stance, potentially reigniting trade tensions with the European Union (EU). A second Trump term will likely result in a continued sidelining of multilateral trade agreements. Trump withdrew the US from the Trans-Pacific Partnership and repeatedly criticized the World Trade Organization (WTO). His return will likely end efforts to strengthen the transatlantic trade relationship.
Overall, the economic impact on European countries will be complex. On the one hand, leaders like Hungary’s Viktor Orbán, France’s National Rally (RN, Marine Le Pen) and Poland’s Law and Justice party (PiS, Jarosław Kaczyński), who are wary of European integration, might view Trump’s economic nationalism as validation of their own sovereignty-focused policies. On the other hand, European economies (such as Germany), that are heavily integrated into global supply chains, will suffer from any renewed transatlantic trade war. However, negative spillovers are likely to be felt in pro-Trump countries such as Poland and Hungary, which are often subcontractors of the German economy.
Geopolitical Realignments: A Test for Europe’s Unity
Perhaps the most significant impact of a second Trump presidency for European allies will be geopolitical. Trump’s first term shook the foundations of NATO and questioned long-standing assumptions about US commitments to European security. His criticisms of NATO, insistence on increasing defense contributions, and outreach to autocratic leaders like Russia’s Vladimir Putin caused considerable alarm among Europe’s establishment leaders, but were seen favorably by some of Trump’s nationalist allies in Europe.
Trump famously called NATO “obsolete,” while demanding that European countries increase their defense spending to meet the alliance’s 2% of GDP target. This rhetoric may resonate with some European leaders who view defense spending through a sovereignty lens, such as Hungary’s Orbán. Yet, a weakening of NATO or a downgrading of the US’s commitment to European defense could expose Europe to heightened security risks, particularly in Eastern Europe where countries rely on the US as a bulwark against Russian aggression.
For populist leaders, a more transactional NATO could be seen as an opportunity to renegotiate their countries’ roles within the alliance. However, for many European nations, particularly in the Baltic and Eastern regions, Trump’s approach to NATO is deeply concerning, as it could embolden Russia and destabilize the regional security order.
Trump’s approach to Russia has been a persistent point of contention within transatlantic relations. His reluctance to openly criticize Putin, alongside accusations of downplaying Russian interference in US elections, created a sense of unease among many European leaders. Yet, some nationalist movements in Europe, particularly those with closer ties to Moscow, might find this stance advantageous.
In particular, Hungary’s Orbán has maintained a pragmatic relationship with Russia, balancing EU membership with economic ties to Moscow. For Orbán and other European leaders skeptical of the EU’s sanctions regime, a Trump administration less inclined to punish Russia might provide more leeway in conducting bilateral diplomacy with Moscow. However, this could further divide the EU, as many member states, especially in the Eastern Europe, view Russia as an existential threat.
Equally concerning, Trump’s financial, organizational, economical, and political support for populist leaders in Europe might translate into further electoral gains for these parties and a stronger position for them within the EU. It might also encourage increasing anti-democratic tendencies among both populist and center-right parties, as has already been seen in Hungary and Poland. These changes potentially will have larger consequences for political cohesion in Europe and even the future structure of the EU.
Uncertainty and Opportunity
For Europe, the election of Donald Trump will bring both uncertainty and opportunity. His economic nationalism, willingness to challenge the global trade order, and transactional approach to alliances might align with the interests of certain European leaders seeking to prioritize national sovereignty over deeper European integration.
Trump’s return will likely also exacerbate existing divisions within Europe. His approach to NATO, Russia, and trade could strain the EU’s coherence and create new fissures in transatlantic relations. The balance of economic and security interests will be difficult to manage, particularly as Europe confronts other global challenges such as climate change, energy security, and rising geopolitical tensions.
Ultimately, a second Trump presidency will require Europe’s leaders to change their strategies, balancing the immediate benefits of aligning with Trump’s worldview against the long-term risks of destabilizing the broader transatlantic order. Whether Europe can navigate these challenges while maintaining its unity remains to be seen.
Edited by Adam Balcer
