How Europe should react to the US presidential elections

Jörg Rocholl is the president of the European School of Management and Technology, Berlin.
Too close to call and too difficult to predict.
Even with two months to go until the U.S. presidential election in November, it’s already fair to say this race has given us more dramatic turnarounds than any other in recent decades.
Following the assassination attempt on former President Donald Trump, his victory seemed to be a sure thing. Then, after President Joe Biden’s withdrawal announcement, the momentum shifted, with Vice President and Democratic nominee Kamala Harris raising $200 million in the next week alone, bringing the total to $310 million in July — more than double the already enormous amount Trump had raised that month. And now, she’s started leading the polls in the three key battleground states of Michigan, Pennsylvania and Wisconsin.
In light of all this, it wouldn’t be at all surprising if the race took yet another unexpected turn, making it even harder to predict any sort of outcome and thus prepare for what’s ahead. Given the race’s significant global importance and impact, this need for preparation is felt almost worldwide — though probably most intensely in Europe during this time of war. And the substantial differences between the two candidates, and their resultant impact on the Continent’s security and prosperity, are indisputable.
It’s often overlooked, however, that massive strategic changes in U.S. politics are underway regardless of the election’s outcome, or rather — one could argue — that Trump is less the driver of these changes and more their symptom. And this should alter Europe’s strategic response.
Europe shouldn’t be looking at the election outcome like a rabbit at a snake, hoping for a seemingly favorable result. Instead, it must independently and quickly define and work toward its own goals regardless of the result — even more so given its unpredictability.
As it stands, the U.S. is in the middle of increasingly shifting its focus toward the Indo-Pacific region, independent of its strong support for Ukraine and the planned return of long-range U.S. missiles to Europe. It’s a process that began under former President Barack Obama — with the catchphrases “pivot to Asia” and “rebalancing” — and continued under Trump.
Today, the Biden administration views China as the greatest and most comprehensive challenge to American security. Consequently, China will remain America’s main competitor for the foreseeable future, receiving the corresponding amount of attention. And U.S. demands that other parts of the world, including Europe, choose sides in this competition will only grow louder, possibly forcing the EU to make tough decisions.
Furthermore, Washington’s undergoing economic policy changes as well, particularly visible with the Inflation Reduction Act (IRA). The tariffs on steel and aluminum that were introduced by the Trump administration weren’t one-off exceptions from a rules-based order. And the Biden administration’s decision to not extend the generous rebates for electric vehicles in the U.S. to European manufacturers highlights the strain on transatlantic cooperation.
From what we know about Harris’ economic policies at this stage, this approach isn’t likely to change if she were to become president either. So, no matter the election’s outcome, there’s a real risk of heightened competition between Europe and the U.S., with both sides trying to attract investment through protectionist instruments, jeopardizing the benefits of free trade and investment.
Since these developments are now a given, they will have several essential implications for Europe:
First, the EU must increase its spending on security and defense. This wouldn’t only strengthen Europe’s own capabilities, but it would also increase the likelihood of U.S. support in times of crisis by countering the recurring accusation of “European free-riders.” It would also be imperative this strengthening includes greater cooperation among the few European countries with significant defense industries, creating a European system that could benefit the civilian sector through innovation and economic growth.
Second, Europe is in need of larger European capital markets, as well as strengthening the euro as a global reserve currency. This would improve the financing of innovation and growth in Europe, while enhancing the Continent’s weight in international capital markets, improving its independence and strategic freedom. Europe doesn’t have a capital problem, but it does have a capital allocation problem. And the integration of European capital markets would be a quintessential step in overcoming this and allowing businesses to start as well as scale.
Finally, Europe needs comprehensive trade agreements. Even those initially critical of the failed Transatlantic Trade and Investment Partnership agreement realized its potential merits when the Trump administration started its tariffs on steel and aluminum, and regretted their initial reservations. This mistake shouldn’t be repeated with other parts of the world, and the Mercosur agreement would be an important next step in the right direction.
The U.S. remains Europe’s most important ally in many ways — especially through NATO. Therefore, Europe’s relationship with China and the U.S. cannot be equidistant. However, regardless of the U.S. presidential election’s outcome, Europe’s interests don’t fully align with Washington. It’s time to finally recognize this and draw the right conclusions.