This Policy Brief was co-authored by Arthur Leichthammer, Policy Fellow at the Jacques Delors Centre in Berlin, and Elvire Fabry, Senior Research Fellow at the Jacques Delors Institute in Paris.
Donald Trump’s re-election as US president presents the European Union with significant economic and political challenges. The prospect of unilateral and aggressive US trade policies risks undermining the EU’s collective economic interests and fragmenting its unity. However, the EU is better prepared to navigate these challenges than during Trump’s first term. This policy brief explores the economic vulnerabilities the EU is exposed to by Trump’s foreign economic policy and investigates the expanded tools at the EU’s disposal to fend off this threat. Through a mix of deterrence strategies and targeted incentives such as increased energy and defence procurement, the EU can bolster its negotiating position, which strength will fundamentally rest on its unity. Moreover, the brief advocates for structural diversification of trade relationships to safeguard its long-term economic resilience.