by Giles Merritt
Insulated from the wider world by his White House entourage of ideologues and sycophants, Trump is bent on policies that will weaken America’s power and influence while strengthening the European Union. So four key points must be conveyed in terms that leave no room for misunderstanding.
These are that Russia is, as Trump would put it, “a loser”. Despite his poker playing skills, Putin doesn’t hold a winning hand of cards. Also, that the pre-eminent global role of the US makes it more vulnerable to hostile reactions than Trump realises. His ‘America first’ policies are doing more to transform the EU from trading bloc into political powerhouse than envisaged by the wildest euro-enthusiasts. Here are the four messages for MAGA.
In choosing Russia, Trump is backing the wrong horse. The disparity between Russia and Ukraine in economic size and military force has apparently blinded Trump to Putin’s weaknesses. The Russian Federation is a Potemkin village, whose aggressive facade hides an economy perilously close to collapse and a rapidly shrinking population. The boost given by moving to a wartime economy is over, with growth slowed to a crawl and inflation at 20 per cent and rising. A debt crisis looms, perhaps by the summer.
The EU that Trump often disparages is far larger and stronger. Its €20tn GDP is ten times that of Russia, and although Europeans share many of the worldwide challenges, their focus is on determined collective action.
Europe’s backing means Ukraine, not Russia, will win the waiting game. Trump’s suspension of military aid threatens Ukraine’s defences within months, but Kyiv can nevertheless trade space for time as did the USSR to defeat Nazi Germany. Faster advances by Russia’s forces would not stave off the time pressures on Russia’s failing economy and its lack of manpower.
Ukraine, meanwhile, can expect a redoubling of European equipment and materiel, including a promised Eutelsat replacement if Trump’s henchman Elon Musk withdraws the Starlink satellite communications system. No one can foretell how the war will play out, but the bottom line is that while time pressures weigh heavily both on aggressors and defenders, Putin’s need for a quick peace deal is the greater and the EU can ensure he’ll be denied it.
Trump is embarking on a wider but un-winnable economic war. American military clout is seducing Trump and his advisers into thinking that he can dictate terms on the security front and in international trade and investment. Europeans need to show him that he has more to lose than to gain.
Tariffs will inevitably come back to bite the US in disrupted supply chains and heightened inflation, but even greater ills will befall America if faith in the dollar is threatened. The euro’s role as a global reserve currency could at last get a huge boost if Trump makes US Treasury bonds less of a safe haven for investors.
Trump’s obsession with the US trade deficit means he’s barking up the wrong tree. Tariffs on the EU would hit transatlantic trade and investment worth €1.6tn a year, including the repatriated profits of US multinationals that help ensure that the EU-US current account, rather than just trade, is in perfect balance.
Thank you, Donald Trump, for hugely boosting European integration. In just a few weeks, the Trump administration has done more to strengthen the EU than Europeans themselves achieved over the last two decades. The need to finance a massive re-armament drive as well as Ukraine’s defence and eventual reconstruction is pushing EU countries towards collective borrowing that will transform the Union.
A new EU borrowing instrument like the €800bn COVID bond is on the cards to help pay for ambitious national defence commitments. How far this new ‘mutualisation’ of debt will go remains to be seen, but it could well give the next relatively modest EU budget for 2028-34 a much-needed boost. The EU was, of course, never created “to screw the US”, as Trump recently claimed, but he’s certainly doing his best to turn Europe against him.
The signs are that Trump’s tactics to hasten a ‘peace deal’ that would amount to a win for Russia are backfiring in other ways. There’s much less resistance from several EU member states – and by the European Central Bank – to flouting international law by seizing some €250bn in frozen Russian assets. That would sustain Ukraine and ensure Russia pays towards its reconstruction, and would deal a body blow to Putin’s own credibility.
Donald Trump has upended US foreign policy and threatens a chaotic disruption of the international rules-based order built up over the last 80 years. He has also signalled to European political leaders that the United States is no longer either a defence or economic cornerstone of the EU and NATO. Their next step must be to tell him in no uncertain terms that they have understood, and accept his challenge.
*Founder of Friends of Europe
**first published in friendsofeurope.org
By: N. Peter Kramer
