Unlock the US Election Countdown e-newsletter without spending a dime
The tales that matter on cash and politics within the race for the White Home
EU capitals are racing to attract up assessments of the bloc’s greatest vulnerabilities if Donald Trump is re-elected to the White Home, as polls counsel the competition is tilting within the former president’s favour.
Senior EU officers are holding each day conferences to stipulate the place a Trump presidency may trigger essentially the most ache for the bloc, mentioned folks acquainted with the talks.
They mentioned matters beneath dialogue included how you can face up to a barrage of commerce tariffs, offset an finish to US assist to Ukraine and preserve sanctions in opposition to Russia if Washington lifts its restrictions.
“Everyone seems to be taking every thing way more critically,” mentioned one senior EU diplomat. “We try to verify we is not going to be taken abruptly.”
The preparations embody formal talks between EU ambassadors and the workers of European Fee president Ursula von der Leyen, in addition to casual teams of senior EU diplomats contemplating doable methods.
Trump has vowed to impose flat 10 per cent tariffs on all imports and is important of US assist for Kyiv and sceptical of Nato, which underpins Europe’s defence.
Polling suggests he’s in a useless warmth in opposition to vice-president Kamala Harris forward of the November 5 election, and has overtaken his Democratic rival because the candidate People trust most with the economy, in keeping with a Monetary Occasions ballot launched this week.
“In my private viewpoint, we will likely be in bother. Deep bother,” one other EU diplomat mentioned of a Trump win. “This disruptive ingredient will likely be large, and the unpredictability will likely be large.”
Charles Michel, the European Council president who represents EU member states, advised the FT {that a} Trump victory would result in “speedy selections” by the brand new US administration “that will have a right away impression, a big impact within the brief time period in Europe, for positive”.
Michel added: “Whether it is Trump, it could be an extra wake-up name that we have to act extra to take our future in our personal fingers.”
Officers concern Trump’s threatened tariffs may scale back EU exports to the US by about €150bn a yr.
The fee, which manages commerce coverage, has already drafted a strategy to supply Trump a fast deal on growing US imports to the EU and solely resort to focused retaliation if he opts for punitive tariffs.
Goldman Sachs forecast this week that the euro may fall by as a lot as 10 per cent in opposition to the greenback if Trump have been to impose widespread tariffs and slash home taxes, whereas a examine by the German Financial Institute in Cologne mentioned a commerce warfare may decrease the GDP of the EU’s greatest financial system by 1.5 per cent.
The most important short-term safety concern of EU officers is how you can proceed assist to Ukraine if Trump cuts off a move of weapons that has performed a significant function in serving to Kyiv thwart Russia’s invasion.
The EU has supplied extra monetary assist to Ukraine than the US. However American weapons stockpiles and capabilities are far bigger than European nations’. Officers briefed on the discussions say there isn’t a risk EU militaries may match what the US is offering.
Officers within the bloc are additionally deeply involved {that a} Trump administration would elevate sanctions on Russia. That may increase the query of how a lot financial strain the EU may preserve on Moscow with out US assist, even when Japan, the UK and different allies saved sanctions in place.
Trump’s scepticism in direction of Nato has additionally exacerbated long-running fears about European reliance on US safety ensures.
“Proper now we’re arguing amongst ourselves about how you can increase €100bn for defence and whether or not we actually must,” mentioned one other EU diplomat, referring to the bloc’s debate a few joint debt difficulty. “If Trump wins, we’ll as a substitute be speaking about €1tn and it gained’t be optionally available.”
The EU talks to arrange for a doable Trump return to the White Home have intensified over the previous month. They observe von der Leyen’s resolution this yr to kind a small in-house war room to arrange for the US election consequence, targeted primarily on commerce and safety points.
Nato officers are additionally brainstorming on how to minimise potential disruption and “Trump-proof” as a lot Ukraine assist as doable. One possibility could be to offer the 32-nation alliance a better say in co-ordinating weapons provide and the coaching of Ukrainian troops to scale back US direct management over each points.
The alliance’s new secretary-general Mark Rutte, who maintained good relations with Trump through the former president’s first time period, mentioned final week that Nato “is not going to lose” its unity on Ukraine.
However Michel mentioned there was no assure that Harris would preserve current US coverage in direction of Ukraine, arguing that each candidates would in all probability establish the US financial system as their key precedence.
“Perhaps the tone will likely be extra well mannered, in a single case, much less well mannered in one other, extra brutal in a single case, much less brutal in one other,” he mentioned. “However the reality is there’s a protectionist pattern in the USA.”
Further reporting by Man Chazan in Berlin
