European leaders swiftly congratulated Donald Trump on his victory over Democratic rival Kamala Harris to reclaim the White House. However, there is a stark recognition that renewed economic tensions may loom on the horizon.
For over a year, European diplomats and leaders have been bracing for the possibility of Trump’s return, intensifying their focus on policies aimed at shielding the European economy from potential trade disputes.
Some officials greeted the election results with disbelief. “I am seeing it, [and] not wanting to believe,” admitted one EU official, speaking anonymously due to the delicate nature of transatlantic relations. “But I am not as shocked as last time.” A second EU source echoed this sentiment: “It is not great, again. At least, I am not as surprised [as in 2016].”
During Trump’s first presidency, many European leaders found his confrontational style difficult, leading to moments of tension. In contrast, Joe Biden’s 2020 victory was widely celebrated in Brussels as a chance for better engagement.
Credit: Shutterstock/Anna Moneymaker
EU Leaders Respond and Prepare
European Commission President Ursula von der Leyen, French President Emmanuel Macron, Spanish Prime Minister Pedro Sanchez, Italian Prime Minister Giorgia Meloni, and Hungarian Prime Minister Viktor Orban were among the first to congratulate Trump. Hungary’s Orban, a long-time admirer of Trump, has even reportedly celebrated the prospect of his return.
EU leaders are set to convene Thursday and Friday in Budapest for a scheduled meeting. The agenda will likely include discussions on transatlantic relations and strategies to address potential challenges from Trump’s policies. A third EU diplomat noted, “There will be a first discussion [on the election outcome] in Budapest,” emphasizing the importance of maintaining European unity. “If [Trump’s rhetoric] is not very different, the main challenge will be Ukraine,” the diplomat added.
Potential Economic Fallout
Trump’s threats of a 10% tariff hike on European imports have raised alarms. He has also warned that the EU would “pay a big price” for not purchasing enough American goods. Trade between the EU and the U.S. is vital, constituting the world’s largest bilateral trade and investment relationship, with a record €1.2 trillion ($1.29 trillion) in 2021. Additional tariffs could exacerbate Europe’s already fragile economic growth.
In a research note, ING analysts warned that Trump’s return could spell Europe’s “worst economic nightmare.” “A looming new trade war could push the eurozone economy from sluggish growth into a full-blown recession,” they stated, highlighting that Germany, heavily reliant on trade with the U.S., would suffer particularly under tariffs on European automotives.
German Finance Minister Christian Lindner, speaking last month at the IMF annual meetings, cautioned against a U.S.-EU trade conflict. “We need diplomatic efforts to convince whoever enters the White House that it’s not in the best interest of the U.S. to have a trade conflict with [the] European Union,” he said. “We would have to consider retaliation.”
Looking Ahead
Despite European leaders’ preparation for Trump’s second term, questions remain about his policies’ potential impact. “It remains unclear whether Trump could indeed prompt deeper integration,” the ING analysts noted, pointing to Europe’s domestic challenges. Leaders plan to monitor developments closely, with the Budapest meeting serving as a key moment for strategy discussions.