The Road Ahead: Rethinking the Transatlantic Partnership

Recent elections in the EU and the US are poised to reshape political dynamics and redefine key areas of cooperation. For the EU, the US election outcome is a stark reminder of the need to redouble efforts to boost European competitiveness and achieve strategic autonomy

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The Road Ahead: Rethinking the Transatlantic Partnership

Recent elections in the EU and the US are poised to reshape political dynamics and redefine key areas of cooperation. For the EU, the US election outcome is a stark reminder of the need to redouble efforts to boost European competitiveness and achieve strategic autonomy, as the incoming Trump administration is amplifying themes of US protectionism and its signature “America First” agenda. At the same time, the EU-US relationship remains an unparalleled economic partnership between the world’s two largest democratic systems and preserving it remains critical.

This analysis is structured in two sections addressing Europe’s strategic challenges. The first examines the EU-US bilateral relationship, focusing on shared interests and potential friction points. The second explores the EU’s position amid escalating US-China tensions, emphasizing its need to balance transatlantic ties with economic and geopolitical realities. Together, these sections illuminate how global tensions, economic interdependence, and technological competition are reshaping transatlantic relations.

This phased approach highlights the EU’s balancing act: maintaining a strong US partnership while fostering resilience to thrive in a multipolar world. Particular attention is given to three critical policy areas—defense and security, climate change, and trade and technology—where transatlantic priorities and global challenges intersect, shaping the path forward.

Transatlantic bond: shared values or shared interest?

The transatlantic bond has been one of the most significant partnerships in modern history, rooted in shared values such as democracy, peace, the rule of law, and economic development. For nearly a century, this partnership has been central to shaping the international order, with the US serving as the EU’s main ally in fostering peace and security.

However, Trump’s return deepens the long-standing tension between the two blocs’ shared values and strategic interests. His transactional approach to foreign policy, evident during his first term and reiterated on the campaign trail, is set to widen divides in the alliance. Defence and security, climate change, trade and technology will likely become flashpoints as Europe contends with a more self-serving US agenda.

Defence and security remain particularly sensitive, with NATO at the core of transatlantic cooperation. Trump’s return could reshape the alliance, reigniting tensions over European defense spending while potentially undermining Biden’s strides in strengthening NATO’s collaboration on hybrid threats and cyber defence.

While Trump has previously suggested reducing the US role in NATO, the alliance’s rules limit such unilateral actions. The real challenge, however, lies not in the prospect of a ‘dormant NATO’ or withdrawal, but in navigating the friction that Trump’s transactional approach could create. Focused on immediate US interests, this approach risks exacerbating divisions over burden-sharing and priorities.

European states are likely to continue increasing their defence investments and pursuing greater strategic autonomy, an effort long advocated by French President Macron. At the same time, Poland, under Defense Minister Wladyslaw Kosiniak-Kamysz, is advocating for stronger EU defence funding and a greater NATO presence in Eastern Europe. Such initiatives highlight the region’s determination to bolster its security amid these evolving challenges.

As transatlantic security dynamics evolve, climate change remains another critical area where shifts in US policy could have far-reaching implications. COP29 last month in Baku coincided with Trump’s election, raising fears of a renewed US withdrawal from the Paris Agreement and its potential impact on global climate cooperation. Under President Biden, initiatives like the Global Methane Pledge and increased LNG exports to Europe strengthened transatlantic collaboration on energy and climate, advancing clean energy goals and reducing Europe’s reliance on Russian supplies.

Trump’s approach to politics, emphasizing short-term US economic gains, could disrupt these efforts. His pledges to boost fuel production and reassess multilateral climate commitments suggest a shift away from global leadership in climate action.

Nevertheless, the EU has also alredy adapted to a more pragmatic global landscape. Policies like the Carbon Border Adjustment Mechanism (CBAM) and investments in renewable energy underscore its readiness to align climate goals with economic interests. These strategies position the EU to find common ground with a less cooperative US, particularly on advancing clean energy technologies and securing critical minerals essential for the green transition.

Challenges extend further into technology and trade, where cooperation and competition are increasingly intertwined. Under the Biden administration, the EU-US Trade and Technology Council (TTC) exemplified efforts to strengthen tech and trade ties, but its future under Trump remains uncertain. In AI governance, the US took a leading role by hosting the inaugural Network of AI Safety Institutes (AISIs) meeting, yet Trump’s opposition to AI regulation and plans to rescind Biden-era executive orders cast doubt on continued leadership. The upcoming AI Action Summit in Paris will test the US’ commitment to global AI governance.

Shifts in EU-US tech collaboration extend beyond the realm of AI. Under Henna Virkkunen’s leadership, the EU is expected to adopt a more collaborative approach to enforcing digital regulations, such as the Digital Services Act and Digital Markets Act, in contrast to Thierry Breton’s more assertive stance. However, this approach may face friction with a regulation-averse Trump administration, further shaped by the influence of industry figures like Elon Musk. While there is some alignment between the two blocs on curbing market concentration in the tech sector, significant differences persist regarding online content moderation. This divergence sets the stage for complex negotiations, with a heightened risk of tech disputes spilling over into broader economic relations.

Trade cooperation has faced growing tensions since the first Trump administration, continuing under Biden with the Inflation Reduction Act (IRA) and contentious negotiations over steel and aluminum. Trump’s proposed 10% tariff on imports, including European goods, risks worsening these issues. EU leaders, including Ursula von der Leyen, have stressed the need to maintain a constructive relationship, proposing measures like increasing LNG imports from the US, while also preparing to implement countermeasures.

While the EU will likely continue prioritising trade openness and collaboration on emerging technologies, it will certainly remain focused on strategic autonomy by reducing reliance on critical technologies like semiconductors and bridging the gap between its strong research base and the development of a competitive tech industry.

Balancing power: EU and the US-China rivalry

As its relationship with Washington is likely to face new strains, the EU must also contend with an increasingly tense US-China rivalry, which is already reshaping global trade, security, and climate policy. Trump’s pledges to impose new tariffs on China and China’s expanding influence signal further polarisation in the global order.

This rivalry extends beyond a bilateral conflict, carrying global implications that reshape alliances, disrupt supply chains, and redefine strategic priorities. For the EU, it poses a dual challenge: preserving its transatlantic partnership while managing its economic ties to China.

Trump’s focus on counetring China risks diverting US attention from European security concerns, including reduced military aid to Ukraine, which could weaken NATO’s eastern flank and push the EU to take on a larger deterrence role. Meanwhile, Russia’s alignment with China adds complexity, underscoring the EU’s need to bolster strategic autonomy in an increasingly competitive global landscape.

In climate policy, COP29 underscored the EU’s unique position in the China-US climate dynamic. China’s expansive green diplomacy and leadership in renewable technologies contrast sharply with Trump’s potential rollback of  multilateral climate commitments. The EU must navigate this tension, leveraging its commitment to global frameworks while balancing its ties to both powers.

A similar situation can be observed in the realm of trade and technology. In 2018, Trump launched a trade war with China, imposing tariffs of up to 25% on various Chinese goods. While Biden has retained many of Trump’s policies and introduced new measures, he shifted from Trump’s full-scale decoupling strategy to a more focused “de-risking” approach, aligning with the EU. As seen by his pledge to impose 60% tariffs on Chinese goods, Trump’s return means that US trade policy is set to revert to a decoupling-based approach, with assertive measures to reduce trade deficits and reshore manufacturing. This shift will disrupt US-EU alignment on China, with Washington pressuring the EU to adopt a more confrontational stance. In addition, the expected US tariffs on China will likely cause a diversion of Chinese exports into the EU market, which would worsen its trade deficit with China and potentially fuel trade tensions with the US. In this environment, the EU must craft a clear strategy on China that protects its economic interests while maintaining a strong transatlantic partnership.

Conclusion

Trump’s return highlights Europe’s need to prioritise its strategic goals and assert its autonomy rather than merely reacting to shifting US policies. The tension between shared values and strategic interests remains central to transatlantic relations, shaping future challenges and opportunities.

To navigate this landscape, Europe must balance preserving democratic principles and advancing strategic priorities. A cohesive and assertive EU is essential to engaging the US and China on its own terms while fostering stability and multilateral cooperation.

Ultimately, Europe’s ability to lead with clarity will determine whether it can maintain strong transatlantic ties, reinforce its strategic autonomy, and act as a stabilizing force in an increasingly fragmented global order.

(Photo credit: Wikipedia)