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Transatlantic economic relations : opportunities and alternatives
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1830-1541
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EUI; RSC; Policy Paper; 2025/07
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DASSÙ, Marta, JONES, Erik, Transatlantic economic relations : opportunities and alternatives, EUI, RSC, Policy Paper, 2025/07 - https://hdl.handle.net/1814/78240
Abstract
The Second Trump administration is determined to use tariffs to push the European Union (EU) into a more balanced economic relationship. This posture is not new. The EU faced similar pressure from the first Trump administration. The solution is not new either. The EU should use a mix of carrots and sticks to encourage the Trump administration to focus on negotiations that can lead to mutual advantage. The EU is well equipped to do that. The anti-coercion instrument gives the European Commission considerable leverage in seeking allies and in creating incentives. That same instrument also insulates individual member states from U.S. diplomatic pressure. More important, Europe can respond to complaints by the Trump administration with measures to improve European competitiveness that the EU should implement under any circumstances. A trade war with the United States would not benefit either side of the Atlantic. A strong European response to the new administration’s policies could shift conversations with the United States in a more productive direction.