Trump’s Dual Impact on Europe: Economy and Geopolitics

Donald Trump’s return to the White House has brought policies that deeply affect Europe on two fronts: the resurgence of trade wars and moves that sideline Europe in the Ukraine crisis. These developments are creating both economic and strategic tremors across the continent. Here are the details of this dual crisis and the uncertainties Europe now faces...

Economic Front: Steel Tariffs and the Return of Trade Wars

President Donald J. Trump

The 25% additional tariff on steel and aluminum imports, announced on February 10, 2025, is a concrete reflection of Trump’s “America First” policy. While framed as a retaliation against the EU’s protectionist automotive tariffs, the move is widely seen as an attempt to cripple Europe’s industrial competitiveness. The EU, which risks losing $6.7 billion in annual steel exports, has labeled the decision “unfair” and “unilateral.” The exemption of USMCA members like Canada and Mexico raises questions about why Europe is specifically targeted.

Europe’s response has been sharp. German Chancellor Olaf Scholz signaled retaliation by declaring, “The 450-million-strong EU will respond,” while European Commission President Ursula von der Leyen emphasized a “proportional response.” History seems to repeat itself: In 2018, the EU countered Trump’s steel/aluminum tariffs by imposing duties on Harley-Davidson motorcycles, whiskey, and corn, sparking a $6.4 billion trade war. This time, however, the stakes are higher. The EU is exploring retaliatory measures across broader domains, from digital taxes to green energy subsidies.

The deeper concern lies in Trump’s risk of normalizing protectionism under the guise of “national security.” This threatens to render multilateral institutions like the World Trade Organization (WTO) obsolete and could unravel the global trade system. For Europe, the collapse of rules-based order represents an existential threat.

Geopolitical Quake: Europe Sidelined as Ukraine Territory Bargaining Begins

The Ukraine war has become the stage for Trump’s second seismic move against Europe. The U.S. administration’s decision to engage in direct negotiations with Russia, excluding Europe from the process, has triggered

a profound crisis of trust on the continent. Trump’s “I’ll talk to the Russians first” approach calls into question Europe’s geopolitical influence.

U.S. Defense Secretary Pete Hegseth’s statement that “Ukraine’s NATO membership is unrealistic” and his dismissal of “returning to pre-2014 borders” have shaken the foundations of the transatlantic alliance. German Defense Minister Boris Pistorius’ warning—“If we concede, Putin will demand more”—encapsulates Europe’s fears regarding Russia. With Ukraine’s NATO prospects shelved and the deployment of U.S. troops to Ukraine now nearly unthinkable, what remains?

Territorial bargaining. Kyiv’s proposal to withdraw from Kursk in exchange for parts of Russian-occupied territories was instantly rejected by Moscow. Russia shows no intent to relinquish Donetsk, Luhansk, Kherson, or Zaporizhzhia. With Russia currently controlling 20% of Ukraine’s territory, how much land Trump’s negotiations might reclaim remains unclear. The reality, however, is stark: Ukraine appears poised to leave the table with territorial losses.

Europe’s Dilemma: Trust the U.S. or Build Its Own Army?

Trump’s demand that “Europe must handle its own defense” implies the continent must ramp up military spending. According to Bloomberg Economics, supporting Ukraine and strengthening defense would require $3.1 trillion over a decade. Yet divisions among EU members are deepening: France and Poland advocate military engagement, while Hungary and Slovakia remain hesitant.

Ukrainian President Zelenskyy’s call for a “European Army” gains relevance in this context. The idea of a defense structure independent of NATO reflects Europe’s quest for strategic autonomy in a world where U.S. reliability is fading. However, this project faces hurdles like political unity and cost-sharing.

History is rife with tales of those left stranded by U.S. alliances:

• In Afghanistan, after 20 years of occupation, the U.S. withdrew in 2021, leaving the Taliban to seize control.

• In Iraq, Saddam Hussein was toppled in 2003, but the 2011 pullout paved the way for ISIS’s rise.

• In Vietnam, the 1975 fall of Saigon became a symbol of America’s tendency to abandon allies.

To avoid a similar fate, Europe is pivoting toward collective defense mechanisms. Yet Trump’s potential concessions to Russia and the ambiguity over Ukraine have thrust the continent into “emergency mode.” French President Macron’s call for an urgent summit of European leaders underscores this panic.

Conclusion: Europe’s Solitary Path in a New World Order

Trump’s policies have left Europe caught between economic and geopolitical fires. Trade wars strain industry, while the Ukraine turmoil upends security architecture. In a world where the U.S. is no longer a “reliable ally,” Europe must take bold steps toward strategic autonomy, military expansion, and energy independence.

But the question remains: Can a “united Europe” bear this burden? The Trump effect may either propel the continent toward a historic turning point—avoiding past mistakes—or exact a heavy toll for its fragmentation...