At the World Economic Forum in Davos, EU Commission President Ursula von der Leyen issued a stark warning about the looming threat of a trade war with the US. Von der Leyen, who in the past had set great store by transatlantic relations and cooperation with the US administration under Joe Biden, now faces a new reality: the return of a protectionist trade climate under the government of Donald Trump, which could pose a threat to the European economy in the coming years.
The EU has consistently emphasized the close economic interdependencies between Europe and the US. European companies employ millions of Americans, and at the same time, Europe imports a wide range of services and goods from the US. However, this solid partnership could now be at risk.
Trump, who during his presidency imposed high tariffs and trade barriers on Europe, has once again taken the helm and signaled that he intends to stick to his protectionist line under his re-election.
“The trade volume between us amounts to 1.5 billion euros, which is 30 percent of global trade. A lot is at stake for both sides” von der Leyen emphasized.
Von der Leyen herself had in the past set great store by cooperation with the US under Biden, but her optimistic assessment is now being overtaken by the real political currents in Washington. Kamala Harris, who was seen by many as a champion of dialogue with Europe, was unable to avert the increasing isolation of the US on the global stage. Now, von der Leyen is forced to re-evaluate her political strategy and warn of the potential consequences of a trade war. The US under Trump could put pressure on Europe with new tariffs and trade policy measures, which could destabilize economic relations in the long term.
The reality that is emerging at the WEF is one of geopolitical and economic uncertainty. The possibility of a trade war, which would accompany the measures planned by Trump against Europe and Asia, casts a shadow over transatlantic relations. In Davos, von der Leyen called on the US to engage in negotiations, but the growing chasm between the political goals of the two sides could prepare the ground for a trade war.
The question now is whether von der Leyen can adapt her strategy to protect the EU from the political and economic consequences of a renewed trade war, or whether the EU will be confronted with the challenges of isolated and protectionist US in the coming years.