European Council President Charles Michel welcomes Hungarian Prime Minister Viktor Orban to the European Political Community Summit in Budapest on Thursday focussing on the Ukraine war in the wake of the re-election of Donald Trump to a second term as U.S. president. Photo courtesy European Council
Nov. 7 (UPI) — Leaders of almost 50 European countries and peripheral nations gathered Thursday in Budapest, Hungary, for the fifth meeting of the European Political Community with relations with the United States under a second Donald Trump administration top of the agenda.
With the war in Ukraine and economic security already key items for the summit even before Trump’s historic comeback win in Tuesday’s presidential election, leaders fear Trump’s campaign pledges were more than just rhetoric and his administration will slow or halt military aid to Kyiv, upend NATO and tackle a $64.6 billion EU trade deficit by imposing tariffs of up to 20%.
In remarks ahead of the summit, European Council President Charles Michel proposed heads of state and government use an informal dinner on Thursday evening for a “strategic debate on our transatlantic relations.”
“Our relationship with the United States is essential and we are ready to deepen it. We have to continue delivering on our priorities in line with the Strategic Agenda, working actively towards a strong and sovereign Europe,” he said in a news release.
“I would like us in particular to focus on three areas: our bilateral relations; security and geopolitics, not least Ukraine; and global challenges and international cooperation, including climate change.”
Trump has promised to unleash U.S. domestic fossil fuel production, scrap key environmental rules, roll back federal support for renewable energy and electric vehicles, and pull the United States out of the Paris Climate Agreement for a second time.
Michel said leaders would also address the situation in the former Soviet satellite of Georgia and discuss the way forward following a disputed election over the weekend with the ruling Russia-leaning Georgia Dream Party claiming a victory that the pro-EU opposition is refusing to accept.
The European Commission had already set up a special task force in anticipation of the U.S. election to game play different scenarios depending on which side emerged on top, with officials “strategizing on how to avoid a trade war, how to ‘Trump-proof’ security arrangements and how to deal with Donald Trump diplomatically,” the Washington Post reported.
“We’re prepared for any bumps that might appear, it’s not our first rodeo. We will do that, as we always do with America, in the spirit of dialogue but also of strength,” Euro News quoted a diplomatic source as saying.
However, the big three players on the European stage are not what they were during the first Trump administration with Germany effectively rudderless after Chancellor Olaf Scholz’ coalition government collapsed Wednesday, France’s Emmanuel Macron forced to share power with a prime minister of another party, and the approval ratings of British Prime Minister Keir Starmer nudging an all-time low.
“Our meeting on Friday will be dedicated to strengthening our competitiveness,” Michel said. “The situation is very worrying. Over the past 20 years, the EU’s share of world GDP has halved. We need to act now. We are at the eleventh hour. The Draghi and Letta reports are a wake-up call that we must be ready to take. The Union’s competitive survival is at stake.”
Michel said a follow-up meeting of the council Friday would be dedicated to strengthening the bloc’s competitiveness to arrest the shrinking of its share of the global economy which he said had halved since 2004.
Trump tariffs would hit the $1.08 trillion in annual two-way trade and services between the EU and the United States by making EU goods, mostly machinery, vehicles and chemicals, more expensive in the American market.
Goldman Sachs has predicted a tariff rate of 10% would lop 1% off eurozone GDP. Other forecasts have the cut as high as 1.5% by 2028.
Germany, Europe’s industrial powerhouse, would likely be hit hardest, with the SUERF European Money and Finance Forum estimating tariffs of 10% could slash as much as 1.6% from its GDP.
Millions of jobs across the EU could also be placed at risk.
The EU’s $168 billion goods trade surplus with the United States makes it low-hanging fruit for Trump trade tariffs and China, the other competitor he is eyeing for tariffs of up to 60%, could make the bloc’s situation even worse by vast volumes of Chinese-exports being being redirected to Europe, flooding the single market.
With the EU’s economy highly leveraged to China’s, that could force the EU to retaliate in kind, triggering a damaging trade war, according to Bruegel Institute senior fellow Andre Sapir.
“The situation is very worrying,” said EC President Michel.
“We need to act now. We are at the eleventh hour. The Union’s competitive survival is at stake,” he said.
