President Biden's honeymoon with Europe is over, replaced by a bitter dance of distrust and simmering resentment. Despite promises of a renewed partnership, Biden's policies echo Trump's protectionism, leaving European allies feeling betrayed and questioning the future of transatlantic economic cooperation.
Broken Promises, Burning Bridges: Europe welcomed Biden with open arms, hoping to heal the wounds inflicted by Trump's trade wars. Instead, Biden retained tariffs, excluded Europeans from lucrative subsidies, and surprised them with restrictions on Chinese tech access, mirroring Trump's "America First" approach. This betrayal stings, fueling fears of a permanent shift in US economic policy, regardless of who wins the next election.
From Honeymoon to Haggling: One European diplomat declared, "The honeymoon is over," reflecting the growing disillusionment. Questions loom: Can Europe rely on the US to uphold the global trading system, or are we facing a trade war between allies? Europe clings to free-trade ideals, wary of adopting US tactics reminiscent of China's. They warn Washington that its "go it alone" approach harms transatlantic unity.
A Reluctant Embrace: The EU has taken tentative steps to defend its industries, easing subsidy rules to compete with US clean-energy incentives. Yet, they remain hesitant, fearing a descent into protectionism reminiscent of China's tactics. European officials caution the US that its China competition strategy is creating collateral damage across the Atlantic.
A Marriage on the Brink: The next US president faces a daunting task: navigating thorny economic disputes to keep this transatlantic marriage afloat. Each issue – tariffs, subsidies, tech restrictions – could spark trade wars, weakening the US-Europe economic alliance.
Fear of Abandonment: While Russia's aggression and China's economic might have muted Europe's response, concerns simmer beneath the surface. Europe worries that a Trump re-election could see the US abandon Ukraine and NATO, creating a security vacuum on their doorstep.
Biden's Double-Edged Sword: Senior Biden officials deny creating a rift, touting alignment on strategic issues. However, their trade agenda evokes Trump's protectionism, casting doubt on their commitment to free trade.
From Idealism to Disappointment: Biden promised unfettered global trade, presenting it as a national security threat that had harmed American workers and empowered China. This protectionist stance deeply disappointed Europe, who had hoped for a return to free-trade principles.
A Tariff Tango: One key test was how Biden addressed Trump's steel and aluminum tariffs on Europe. While he suspended them, he imposed new, albeit smaller, ones, costing European exporters millions. Despite repeated pleas, Biden refused to remove them entirely, further straining the relationship.
Missed Opportunities: At a summit, the US pushed the EU to impose tariffs on Chinese metals, raising WTO violation concerns. Last-minute negotiations resulted in a vague statement, leaving Europeans confused and frustrated.
The Subsidy Sting: The Inflation Reduction Act, designed to boost US clean energy, rankled Europe. Its tax breaks favor US-made products, potentially disadvantaging European competitors and diverting investment away from the EU.
Macron's Confrontation: During a White House dinner, French President Macron directly confronted Senator Manchin, the bill's architect, accusing him of harming France. The US electric vehicle tax credit, requiring assembly in North America, further fueled European anger.
Negotiations Stalled: While the Biden administration initiated talks for a new minerals trade deal to appease Europe, progress has stalled. Despite this, they claim it has helped ease concerns about the Inflation Reduction Act.
Pandora's Box of Retaliation: Both sides threaten retaliation over global tax rules. Republicans threaten levies on European companies if the EU enforces a minimum tax on multinationals. Europe counters with potential taxes on US tech giants.
Trump's Looming Shadow: Trump's proposed 10% tariff on all imports worries Europe. ECB President Lagarde sees his potential re-election as a "threat," citing tariff fears and his NATO attacks.
Common Ground Despite the Divide: Though protectionist, the Biden administration shares Europe's climate concerns, unlike Trump who threatened to scrap Biden's climate agenda. Additionally, they collaborated on Russia sanctions and LNG supplies to Europe during its energy crisis.
The Ukrainian Wildcard: While economic concerns weigh heavily, the biggest fear for many Europeans is a Trump victory potentially leading to US abandonment of Ukraine, leaving them exposed to Russian aggression.
