Throughout the post-Cold War era, the 27 member states of the European Union (EU) relied on four key assumptions: the United States’ willingness to shoulder the primary responsibility for European security, the reliability of Russia as the major source of energy, China’s status as a major growth market for European goods, and the budgetary durability of prioritizing social benefits over security needs. 

These assumptions, which worked for several decades, provided a foundation for the European way of life constructed around political stability, democratic governance, generous social programs, favorable borrowing terms from international capital markets, and the projected image of a reasonable, soft-power alternative to China, Russia, and the United States. These assumptions are no longer valid. The last three years have witnessed remarkable changes, mostly to Europe’s disadvantage. 

Considering the tectonic shifts in the global system, Europe is now under pressure on several fronts, one of the most important being trade negotiations with the United States. It can ill afford a protracted and economically disruptive trade war with its largest export market. Indeed, both sides have much to lose if this were to occur. In 2023, the US-EU trade in goods and services stood at $1.4 trillion. A hastily negotiated trade deal may not be ideal for either party, but it is essential to maintain some sense of equilibrium in transatlantic relations.

Europe has long assumed that it could depend on the United States to guarantee its security. At the same time, it was believed that the North American country was content to endure European trade and non-tariff trade barriers that protected its home markets. With the advent of Trump 2.0, this has changed. Europe’s annual trade surplus with the United States—at $236 billion in 2024—has become a sore point and target for the America First agenda. Consequently, Washington is demanding a more level trade playing field while signaling that the days of picking up the defense bill are over.

American grievances include high EU tariffs on certain goods such as fish, seafood, trucks, bikes, and automobiles, as well as EU digital regulations that unfairly target large technology firms, an issue exacerbated by hefty fines on Apple and Meta. Other issues include

© The National Interest