Trump is not yet President, and already we are confronted with many questions and uncertainties. The team chosen by Trump is a very diverse one. A recent article in The Economist (January 4th, 2025) mentions that there are three different groups amidst Trump’s selection for his team: “conservative mainstreamers, America firsters and tech tycoons”. The leader in the same Economist edition has the title “The fight over America’s economy”. This fight is especially one between the MAGA people and the tech tycoons: “Whereas the MAGA movement hopes to restore a vision of the past, including an impossible return to a manufacturing heyday, tech looks forward. It wants to accelerate progress and disrupt society, leaving the world for which MAGA yearns ever farther in the dust.”
Certainly, the different parts of the Trump team agree that America - and the rest of the world - needs fewer regulations, lower taxes, less immigration - regardless of low skilled workers - and an aggressive and brutal stance on foreign opponents. And many would see China as the biggest threat to the United States - economically and militarily. But also, here Musk would have a somewhat differentiated position, as the most successful Tesla factory is in China, whose big market he does not want to lose.
But if you take into account the different statements by Trump and Musk, it is clear that the leading US-figures are unimpeded and uninhibited by sensibility and tact in trying to enforce their economic and political interests. They will interfere into national interests of other countries, and one must fear that some leaders - including European ones - will follow their new idol and ideological leader on the other side of the Atlantic. Instead of defending European and national interests, they will try to please him in order to receive some benefits.
The European Union must nevertheless find a way to defend its interests and at the same time try to find some agreements or better deals with the United States. It can’t be an either/or strategy but must include both elements. What is decisive in this respect is that Europeans recognize the importance of China as the big competitor for the MAGA project and that European security and defense must be put on a new basis.
U.S., Europe, and China: The Economic Dispute
China’s economic and military development has been, for several years, the biggest challenge for the U.S. Both growing manufacturing and supply of cheap Chinese products, as well as the Taiwan issue, are of great concern. Already in the first Trump era, China dominated his agenda. Biden developed what many characterized as “small yard, high fence” policy. That entails that for a limited number of critical and sensitive technologies, there should be a high fence of investment and trade controls. As Geoffrey Gertz - who worked in the Biden administration - wrote recently in The New York Times (January 4-5th, 2025): “It is an attempt to achieve two goals that are inherently in conflict - pushing a fundamental shift in the geopolitics of technology competition without upending the global economic order.” It is doubtful that Trump will just continue this strategy of “small yard, high fence”.
Thorsten Benner, Jakob Henning, and Florian Klumpp argue (Foreign Policy, December 20th, 2024) for a common US and EU-strategy concerning China. “Despite mentioning tech leakage in their high-level Economic Security Strategy, Europeans also never truly got on board regarding the central bipartisan motivation in the United States for de-risking, namely the effort to contain China’s military modernization by restricting access to cutting-edge technologies.” Now Europe should link itself to the Trump policy concerning China.
Of course, it would be unfair and foolish to deny China a sound economic development. But more and more, Europeans also have to recognize that the Chinese strategy is not just an- often unfair - economic one but is part of a broader strategy to dominate primarily the Asian area and also to have a strong and rising authoritarian global voice and influence. Europeans should not be naive about Xi Jinping’s policies, from supporting the Russian invasion of Ukraine to the threats of bringing Taiwan back into China by military force. China is clearly working on an alternative global economic governance system with itself as the main economic, political, and military player.
Unfortunately, Europe is still vulnerable to Chinese economic coercion, not least because of Chinese domination in the processing of rare earth and other elements, which are necessary for the green energy transformation. Reducing that dependence and following a policy of de-risking is of great importance - independently of trying to ‘please’ Trump. Europe has already started a policy of de-risking vis- à -vis China, but some member countries are not following this strategy and hope to benefit from special relations with China.
Anyway, besides trying to develop a common China policy, Europeans should, of course, be prepared to target American products with tariffs if Trump is implementing his anti-EU tariff policy. This should not lead to an overall breakdown of free trade, but we should not be shy away from retaliating against Trump’s tariffs actions. In all cases, the European Union must be prepared to act if Trump is not open to a reasonable and common China policy and wants to go aggressively against China. Europe cannot be the area where China dumps all the surplus products it cannot sell because of Trump’s tariffs. Already, several countries in the neighborhood of China are protesting against this Chinese strategy and are banning the platform Temu, which offers cheap Chinese products and disrupts the respective home markets.
Certainly, it would be helpful to convince China to develop an economic policy based on stronger domestic consumption and refrain from an aggressive economic and political stance toward the outside world. On the other hand, the U.S., and even more so Europe, would benefit from greater dedication to an innovative industrial policy. Thomas L. Friedman proposed in article in The New York Times (December 21-22th, 2024) that “Elon Musk and Taylor Swift can help resolve the U.S. - China divide”: “America would use higher tariffs on China to buy time to lift up more Elon Musks - more homegrown manufacturers who can make big stuff so we can export more to the world and import less. And China would use the time to let in more Taylor Swifts - more opportunities for its youth to spend money on entertainment and consumer goods abroad, but also to make more goods and offer more services - particularly in health care - that its own people want to buy.“
In this respect, the joint article of A. G. Laya, C. Grand, K. Pisarska, N. Tocci and G. Wolf (Foreign Affairs, January/February 2025), titled “Can American Abandonment Help Europe?” has a clear message: “…Europe and the United States should not lose sight of the fact that they share an interest in nudging China to rebalance its economy and reduce its excess manufacturing capacity. Both Europe and the United States also seek to bolster their economic security against Chinese cyber-risks and Beijing’s dominance of supply chains for critical minerals. European fiscal and monetary policymakers should therefore reach out to the new administration to discuss how to cooperate on reducing excessive dependence on Chinese supplies in areas critical for national security. They should jointly negotiate with China to make clear that China needs to boost domestic demand. “
The wording of the famous journalist Thomas L. Friedman and of the prominent political and economic scientists is different, but the message is the same: we need a rebalancing of global economic relations. This question is also raised in an IFRI Paper, “How Political Tensions Reshape Trade Patterns” (December 2024). For the researchers of IFRI, the clear cause of geo-economic fragmentation of trade flows lies in the “massive surge in China’s surplus in manufactured goods trade, up to 11% of the world’s total or theses products since early 2023. Sudden and common to all main directions and all main sectors, this push has been policy driven.” IFRI also pleads for rebalancing and proposes: “IMF and G20 meetings are places where these matters can be discussed. The difficulty of putting pressure on surplus countries to adjust has been a structural problem ever since the Breton Woods conference, but an approach coordinated across a large array of partners is probably the most efficient way to proceed.”
In addition, the rebalancing of trade would not only change economic relations but also contribute to a less conflict-ridden and confrontational relationship between the U.S., Europe, and China. Unfortunately, I fear that neither the U.S., with Donald Trump as President, nor China, under the leadership of Xi Jinping, is ready to follow such a constructive course. Furthermore, Trump could be too proud to elaborate a common China strategy with the European Union and other partners. On the other hand, Trump could be interested in making a global deal, and so we could be surprised.
Anyway, such a rebalancing of global economic relations should be a task undertaken in the framework of international, multilateral organizations. But while China is playing lip service to multilateralism, Trump is an aggressive opponent of multilateral talks. To him, multilateral negotiations do not provide enough opportunities to make a personal deal. Nevertheless, the European Union should try to convince the U.S. and China that this would be the best and most efficient way.
Even more importantly, Trump should realize that a unilateral “maximal pressure” policy may result in the opposite. China might become even more determined to work on an alternative global economic and financial governance system. And there are many countries that would like to align themselves with Chinese efforts to build such an anti-American global system.
U.S., Europe, and Russia: The Security Dispute
The U.S. has long argued for an increase in European military spending. Especially Donald Trump insisted on Europe taking responsibility for its own security - parallel to his demands to other countries, in particular Taiwan, in its conflict with the People’s Republic of China. Recently, he even asked European NATO partners to increase their defense spending to 5% of GDP. However, looking only at the abstract figures does not give a real picture of the efforts countries undertake to strengthen European security. A recent study by the Rand Corporation for the Secretary of Defense, “What NATO Countries and Other U.S. Allies Contribute to the Collective Defense” shows that the U.S. contribution “is still by far the biggest contributor - but it’s not as lopsided as it might seem.” It is important to examine what the money is spent on and whether it contributes to the strength of collective efforts.
The decisive difference between Trump and his predecessors is that he is not an admirer of collective defense and is not interested in being the guardian of European security. “America First” means that the pivot to Asia represents a clear reorientation of U.S. defense and military policies. But if Europe takes responsibility for its own security, would Trump still ask for support for an eventual military engagement elsewhere, especially in Asia? And considering the present participation of troops from North Korea in the war against Ukraine, can security be compartmentalized into different regions of the world?
In view of the Russian aggression against Ukraine and numerous threats against other European countries, including an extensive cyber war, the issue of who is responsible for European security is paramount. As much as one can hope that this war ends soon, we should be aware that Trump may advocate for a weak compromise with Russia, involving ample territorial concessions by Ukraine and without security guarantees.
Stephan Wertheim from the Carnegie Endowment for Peace wrote recently in The Financial Times (December 30th, 2024) that Europeans “are grasping for a security umbrella that flew away long ago.” Europeans must wake up and see things as they are: there is a wide consensus in the U.S., that their security and defense needs in Asia take priority over those in Europe, and the U.S. is not at all interested in a direct war with Russia. Stephen Wertheim proposes that the Europeans “should approach the new administration with a plan to replace many U.S. troops in Europe and develop capabilities to wage high-intensity warfare. In return, Trump should agree to stay within NATO to enable a responsible security transition over the next decade.”
Also, the authors of the above-mentioned article “Can American Abandonment Help Europe?” argue for a stronger military commitment of European countries. “A Europe without US-forces, weapons, or security guarantees for Ukraine is now in the realm of possibility. But as undesirable as this scenario may be, European countries are capable of finding a homegrown solution. If a cease-fire is established, European countries will, at a minimum, need to monitor and enforce its likely fragile framework and provide strong security guarantees and support for deterrence and Ukraine’s (and more broadly Europe’s) defense.”
We must be aware that a quick and decisive increase in military spending would only raise the prices for military equipment and profits in the defense industries. Neither the European defense industry nor is the American one able to deliver the necessary weapons that an increased military budget could finance. Both, the U.S. and, in particular, Europe need to rebuild its defense industrial bases. This is also the task of the new EU-Commissioner for defense. But it will take time and effort to overcome national prerogatives and particularities in the production and purchasing of military equipment.
In addition, it must be clear how future wars will and should be fought. Marlin Karlin speaks in an article (Foreign Affairs, November/December 2024) of the “Return of Total War”: “In both Ukraine and the Middle East, what has become clear is that the relatively narrow scope that defined war during the post - 9/11 era has dramatically widened. An era of limited war has ended; an age of comprehensive conflict has begun… combatants draw on vast resources, mobilize their societies, prioritize warfare over all other activities, attack a broad variety of targets, and reshape their economies and those of other countries. But owing to new technologies and the deep links of the globalized economy, today’s wars are not merely a repeat of older conflicts.”
The new ways of waging war also have repercussions for the development and use of military equipment. One such example is the dispute over the F-35, produced by Lockhead Martin, and the views of Elon Musk. For Musk, increasingly sophisticated drones are much more necessary than very expensive piloted fighter jets. Others - and not only those within the respective industries - argue, that drones would not be a substitute for crewed forces. AI will not replace human fighters.
Nevertheless, things have changed dramatically -as Michael C. Horowitz writes in Foreign Affairs (November/December 2024): “In the era of precise mass, war will be defined in large part by the deployment of huge numbers of unscrewed systems, whether fully autonomous and powered by artificial intelligence or remote-controlled, from outer space to under the sea.” And unfortunately, this has some consequences: “Focusing on precise mass allows militaries to prepare for the possibility that a war will not finish quickly and that years of combat lie ahead.”
Irrespective of this specific discussion, the increase in military spending will put a lot of strain on already scarce financial resources due to weak economic growth in EU-countries. In addition, political and especially populist forces - some of them influenced by today’s Russia - may organize public opinion against an increase of military spending. Especially if some argue for increasing military spending by reducing social expenditures, this will not be widely accepted.
One way to ease the issue of unpopularity of increased military spending would be to make spending more productive. The divisions within the European defense capacities contribute to an unnecessary overspending. Lars Frölund and Fiona Murray recently argued under the title “Europe Needs Defense Capabilities” (Project Syndicate, January 6, 2025): “Focusing on collective, rather than national, interests would enable large economies of scale. Each country could build on its comparative advantages - both in technological innovations and military capabilities - and thus strengthen European resilience for decades to come.” It is absurd to discuss only the percentage of military expenditures in relation to GDP instead of the efficiency - or rather inefficiency - of how the money is spent.
Furthermore, the question has to be answered: Are higher military expenditures the only solution to the new risk situation in Europe? Even when taking into account the aggressive Russian policy and the new alliance between Russia, China, North Korea, and Iran, can a way be found toward a new path to peace, even if it is a “cold peace”? Again, one should not be naïve. Without strengthening the military means to avert the current and possible further threats, security in Europe is in danger. But parallel to increased defense capabilities, one should look for even small possibilities to open a window toward a new European – and perhaps global - order of peaceful coexistence.
U.S., Europe, China, and Russia: The Regulation Dispute
The European Union has been, from its inception, a political entity committed to regulating national economies and, increasingly, societies to promote peace, tolerance, democracy, and social and environmental well-being. While economic cooperation and the establishment of a common market were at the core of its legislative efforts, the EU has evolved significantly in recent years. A strong focus has emerged within the European Commission and the European Parliament to regulate tech companies, particularly those operating in the domains of public information and communication. Central to these regulatory efforts are the protection of individual consumer rights and the fight against fake news.
In contrast, the United States – often influenced by powerful tech tycoons – has generally been resistant to imposing stringent regulations these companies. This long-standing transatlantic divide has widened significantly with Donald Trump’s re-election as U.S. President. With many tech executives now aligned with Trump’s administration, the gap in regulatory approaches between Europe and the U.S. has become more pronounced. The reduction or outright elimination of efforts to remove obvious fake news from platforms like Facebook, X (formerly Twitter) among others, complicates Europe’s fight against disinformation, making it even more challenging, if not impossible. Such developments are welcomed by Russia, China, and other actors - including domestic European groups - who actively spread fake news to undermine European resistance to their aggressive policies.
Europe must not give in to this so-called “freedom of speech” strategy. As a recent comment in the Financial Times (January 9th, 2025) emphasized: “Europe’s democratic values are so fundamental that its leaders should not shy from enforcing rules designed to protect them - even if that risks clashing with the X or Meta bosses, or the returning U.S. president.” David Allen Green, a regulatory and media lawyer, recently wrote (Financial Times, 11/12th January 2025): “to impose effective regulation against unwilling platforms will require determined, unflinching governmental action and political will.” He adds: “The re-election of Donald Trump provided Meta with a glorious opportunity to pivot from the futile cooperation with the EU to confrontation and coercion.” Despite these challenges, the EU must demonstrate “the determination and stomach for what will become an ugly public multinational row.” The Europeans should be aware of what the famous philosopher Slavo Zizek wrote in his “What lies ahead when there is no Future?: Today’s anarcho-capitalism aims at transparency, but the paradox of a discourse of transparency is that it simultaneously authorizes the large-scale but opaque use of data, the dark web, and the fabrication of information.”
Unfortunately, some within Europe are more prepared to engage in internal disputes over these regulations than to face confrontation with the combined political and tech forces in the U.S. The only hope lies in the resolve of a strong European Commission and Parliament.
Even more fragmentation
The world has become increasingly fragmented in recent years, even as the findings of the recent Global Cooperation Barometer 2025 published by the World Economic Forum appear cautiously optimistic, “The barometer finds that after trending mostly positively for the better part of a decade, overall global cooperation is above pre-COVID-19 pandemic levels but has flatlined over the past three years. A key reason for the stall has been the significant degradation in global peace and security, which has pulled the barometer’s overall measurement down. Still, the barometer shows that while cooperation may be slowing in some areas, there are also signs of growth.”
Despite these nuances, I fear that many of Donald Trump’s recent announcements contribute significantly to global fragmentation. His policies amplify the perception that multilaterism is becoming obsolete. As the WTO has noted, the number of countries using tariffs to undermine international trade has risen in recent years. Under Trump’s renewed leadership, this trend will get an additional boom. Trump has also displayed a troubling disregard for international borders, with aggressive claims for territorial expansion and saber-rattling. His willingness to employ military means to alter borders only deepens global insecurity. Furthermore, his calls to dismantle collective security arrangements and encourage nations to independently manage their security are driving up military expenditures while simultaneously eroding global stability.
So far, European leaders have largely refrained from issuing clear, firm responses defending European interests and some basic principles of multilateralism. Maybe European leaders are avoiding provoking Trump. But Trump is certainly not respecting cowardice. On matters where Trump raises valid points, Europe should be willing to engage in dialogue and seek mutually beneficial agreements. But they must not be compromise on issues that are core principles and values of global cooperation
The above-mentioned “Global Cooperation Barometer” concludes that we need “disordered cooperation”: “Leaders should be open to new approaches to cooperation that may depart from the more stable global context… Instead, within today’s unsettled political and geographical periods, leaders must be opportunistic and open dynamic partnerships that may differ from issue to issue. Though this approach may feel disordered, ultimately, it will likely have the greatest chance of delivering effective solutions.” One can only hope that the European Union and its main actors are flexible enough for such “disordered cooperation” and that not too many values and principles are sacrificed in the course of such differentiated strategies.
A recent worldwide opinion poll organized by the European Council for Foreign Relations - together with some partners - and commented on by Ivan Krastev, Timothy Garton Ash and Mark Leonhard, yields interesting conclusions. The only strong rejection of Trump’s can be found within the EU, in the United Kingdom, and South Korea. In all other countries, including China, India, Russia, Brazil, South Africa, Turkey, etc., his re-election is seen differently. Many people in these countries “seem to see a Trump-led US as a “normal” great power among many in an à la carte world… Many also believe the president-elect is committed to ending wars in Ukraine and the Middle East.”
Even though we should never forget that multilateral and multinational talks and negotiations have been the best way to avoid conflict and wars, Europeans must accept the new reality of “Trump’s global welcome”. “They need to recognize the advent of a more transactional world. Rather than attempt to lead a global liberal opposition to Trump, they should understand their own strength and deal with the world as they find it.”
However, in the end, transactional policies also lead to transactions about and transfers of territories and people - without their will and consent. If there are no accepted multinational institutions that work on the basis of human rights and respect for people’s choices, it is just - mostly authoritarian - leaders who decide. That will become the new reality under Trump, Putin, and others.. It could mean that European ideas and efforts to overcome the past, often cruel and deadly competition between nations, will be undermined and threatened.
Whatever strategy the European Union is forced to adopt, let us not forget that Commission President Ursula van der Leyen promised at the beginning of her first mandate to lead a “geo-political” Commission. But decisive action must come not only from the European Commission but from the EU as a whole, including the Council and Parliament. Regarding the European Council, its president, the former Portuguese Prime Minister Antonio Costa, should be inclined to act accordingly. However, the number of member states with more nationalistic mindsets is increasing. Inside the European Parliament, the last elections resulted in a rise in nationalist and even anti-European members. Often, they are more inclined to accept lessons from right-wing Americans like Elon Musk than to support European interests. It will take a great deal of convincing politicians and deploying arguments to organize support for a geo-political and geo-economic European Union. These politicians should also recognize that - as the aforementioned opinion poll demonstrates - outside Europe, there is a stronger belief in the global capacities of the European Union!
Dr. Hannes Swoboda, President of the International Institute for Peace (IP), started his career in urban politics in Vienna and was elected member of the European Parliament in 1996. He was Vice President of the Social Democrat Group until 2012 und then President until 2014. He was particularly engaged in foreign, enlargement, and neighborhood policies. Swoboda is also President of the Vienna Institute for International Economics, the Centre of Architecture, the University for Applied Science - Campus Vienna, and the Sir Peter Ustinov Institute.