The True Dangers of Trump’s Economic Plans
His Radical Agenda Would Wreak Havoc on American Businesses, Workers, and Consumers
Russia’s invasion of Ukraine caught Europe by surprise. Although U.S. intelligence services predicted the Russian offensive almost to the day, few European leaders took heed of their warnings, instead choosing to believe that Russian President Vladimir Putin would use nonmilitary means to destabilize Ukraine. Germany’s new chancellor, Olaf Scholz, was among the European leaders who sleepwalked into the crisis. Like much of German society, his administration was completely unprepared for a major war in Europe. For too long, the German government had clung to old certainties: that close energy ties with Russia fostered stability, that trade promoted political change, and that dialogue with Moscow was valuable in and of itself. The awakening was brutal. Overnight, all these cherished assumptions were shattered.
But the shock of Russia’s war of aggression occasioned an impressive about-face in German foreign and security policy. Within days of the invasion, Scholz’s government scaled back energy imports from Russia, began arms deliveries to Ukraine, and announced a 100 billion euro special budget for defense investments, which would allow Germany to achieve the goal of spending the equivalent of two percent of GDP on defense that NATO members have pledged to do since 2014. Along with other EU countries, Germany joined the United States in imposing an unprecedented raft of sanctions on Moscow. The message from Berlin was unequivocal: Germany needs hard power to preserve European security.
This sudden transformation in Berlin has helped strengthen the transatlantic alliance, bringing Germany and the United States into closer alignment than they have been in years. After the tumult of Donald Trump’s presidency, Germans have welcomed the return of the United States as a resolute defender of European security and of the rules-based international order. At the same time, however, the war in Ukraine has opened Germany’s eyes to the risks of depending on the United States for security when Washington is focused on great-power rivalry with China and mired in its own democratic uncertainty.
Germany still regards the United States as an indispensable lifeline, but the possibility of Trump or some other Trumpist candidate retaking the White House has German officials deeply worried. As Norbert Röttgen, a German lawmaker who previously served as chair of the Bundestag’s Committee on Foreign Affairs, stated publicly, the greatest threat to European (and German) security is the “precarious, endangered state of American democracy.” To prevent their relationship from withering during a future far-right American presidency, Germany and the United States must urgently fortify the transatlantic alliance, deepening security and trade ties while forging a common approach to the challenges posed by China and climate change. In an era of increasing geopolitical uncertainty, only a future-proofed transatlantic bond can ensure the security of Europe.
During Trump’s presidency, U.S.-German relations sank to their lowest ebb in the postwar era. Trump’s personal aversion to German Chancellor Angela Merkel, combined with fundamental policy differences, produced a toxic relationship, with the two leaders at odds over everything from Merkel’s handling of the refugee crisis in Europe to Trump’s unilateral withdrawal from international agreements to Germany’s insufficient defense spending. (On this last issue, Trump had a point.) Germany became one of his favorite punching bags, and he reveled in slamming the country as a free rider on U.S. defense spending.
The election of U.S. President Joe Biden was a stroke of luck for Germany. An experienced transatlanticist and old-school NATO supporter, Biden was warmly welcomed in Berlin, as he was in other European capitals. In addition to restoring American leadership on the world stage, his administration immediately began repairing relations with Germany: Biden hosted Merkel at the White House before any other European leader, reversed Trump’s decision to pull U.S. troops out of Germany, and withdrew U.S. opposition to the controversial Nord Stream 2 gas pipeline connecting Germany to Russia. (The pipeline died a sudden death with Putin’s invasion of Ukraine, but for years it had been a source of friction between Berlin and Washington.)
Although the return of the United States as a European security power was met with great relief in Berlin, Germans across the political spectrum still view the United States with concern. The events of January 6, 2021, sent shock waves through Germany: the extreme political division on display at the U.S. Capitol, coupled with a political discourse poisoned by the culture wars, underscored that American democracy was more fragile than even four chaotic years under Trump had suggested. With the exception of supporters of the far-right Alternative for Germany party, who make up roughly 13 percent of the German electorate, Germans of every political stripe fear the return of Trump or of another Trump-like American leader.
The possibility of Trump retaking the White House has German officials deeply worried.
The German media highlight these concerns, scrutinizing political developments in the United States for signs of a Trump return. Events that would be of little note even in a neighboring European country—the results of primary races with Trump-supported candidates, the various legal troubles of Trump and his family—are often prominent news in Germany. Of particular fascination and bewilderment to Germans is the Republican Party’s continued deference to Trump after his defeat and the infamy of January 6. Even among conservative Christian Democrats, who once maintained close ties with American conservatives, there is widespread concern that the United States could face a full-fledged constitutional crisis if the results of the 2024 presidential election are contested.
Part of the worry in Germany stems from a general concern about the precarious state of democracy worldwide. Should the next U.S. president fail to act as a defender of democracy and a leader of democratic states, the balance of power between weakening democracies and strengthening authoritarian regimes could shift even further in favor of the latter. This is an acute danger for Europe, since strong right-wing and illiberal forces that harbor sympathies for authoritarian regimes are already gaining ground in France, Hungary, Italy, Poland, Sweden, and Turkey. These movements would gain additional momentum if the United States were to fall back under a Trumpist regime, potentially contributing to the destabilization of the EU.
Germans also worry about the security implications of another “America first” president. The United States’ hasty withdrawal from Afghanistan exposed the dependence of European allies on U.S. military support; without U.S. troops, their presence in the country was unsustainable. The security situation in Europe is different, of course. But there, too, the Germans and especially the eastern Europeans know that they cannot guarantee their own security without the United States. Europeans view Washington’s growing focus on Beijing with unease, knowing that the United States’ turn toward Asia will force Europe to shoulder more of the military responsibility for containing Russia. The memory of Trump’s NATO skepticism and disdain for Western alliances is still vivid in Europe. So is Trump’s hostility toward the European Union, which he once called “worse than China.”
Germany is currently preoccupied with managing the fallout from its failed Russia policy. Energy prices are skyrocketing, straining social cohesion and raising fears that popular support for German efforts to aide Ukraine’s military (currently at 70 percent, but slipping) could crumble as winter approaches. What is needed, however, is strategic foresight. Germany must anticipate and plan for possible instability in the United States after the 2024 presidential election. Working through and with the EU, Berlin must strengthen the transatlantic alliance so that it cannot be broken, even under another Trump-like U.S. administration.
Most urgently, European security policy must be reinvigorated. Germany has taken a big step forward with its recent hike in defense spending. But more government funding for national security will not be enough. Europe’s defense market is extremely fragmented. Twenty-seven EU member states use over 170 types of major weapons systems procured from many different arms manufacturers. Efforts to harmonize defense capabilities and create new joint defense systems are ongoing, but they must be intensified.
Instead of “strategic autonomy” from NATO, as French President Emmanuel Macron has advocated, the goal should be to strengthen the European pillar of the alliance. At the same time, the EU must pursue a more assertive foreign policy. To do so, it will have to abandon the principle of unanimity by which it currently makes foreign and security policy decisions. Making decisions by “qualified majority”—that is, at least 55 percent of countries representing at least 65 percent of the EU population—as the bloc does in other policy areas would be a major improvement. This would prevent lone countries from vetoing proposals for EU sanctions, for example. But to get small and medium-sized EU countries to relinquish the unanimity requirement will likely take a pragmatic, step-by-step compromise.
Germany cannot afford to wait and see what happens in the United States in 2024.
The EU should also exhaust all possibilities for trade cooperation with the United States. The U.S.-EU Trade and Technology Council that launched in 2021 was a good start, but its ambitions are limited to consulting and coordinating between the parties. A genuine U.S.-EU free trade agreement would make a huge strategic difference, since it could also strengthen the position of both partners vis-à-vis China. Unfortunately, there is little political will to pursue such a deal as protectionist sentiment rises on both sides of the Atlantic. Nevertheless, the EU and the United States should aim for smaller agreements—for instance, to eliminate all tariffs on industrial goods—that would bolster transatlantic economic ties. The EU should also expand its network of bilateral and plurilateral free trade agreements, adding further ballast to the rules-based global economic order.
To ensure that China does not drive a wedge between the United States and Europe, Brussels and Washington should aim to forge a common approach to the challenges posed by Beijing—not just on trade and technology policy but also on security policy. China is the area of the transatlantic relationship with the greatest potential for conflict, and a collision between Beijing and Washington would be highly detrimental to European economic interests. Finding common ground will require both the United States and the EU to make adjustments: Europe will have to make a meaningful military contribution to containing Chinese aggression in Asia while the United States will have to leave more room for cooperation with China, especially on global problems such as climate change and pandemics.
Finally, the EU and the United States should formalize the many commonalities in their environmental and climate policies into a cooperation agreement that they could adopt at the next U.S.-EU summit meeting. Such an agreement would help lock in the progress the United States has made on climate and energy policy during the Biden administration, making it harder for a future U.S. administration to reverse.
As Russia’s reversion to naked imperialism has shown, the transatlantic alliance remains a bedrock of German security and economic prosperity. But with Trumpism still alive in the United States and right-wing populism on the rise in parts of Europe, that alliance is likely to face difficult stress tests in the coming years. To ensure that it survives, the EU must do everything in its power to fortify its relationship with the United States between now and the next presidential election. That, in turn, will take more leadership from Germany, ideally in cooperation with France. Berlin is understandably consumed by the crisis in the heart of Europe, but it cannot afford to wait and see what happens in the United States in 2024.