The EU should recognize that its interests are expendable as the US pursues its primacy via a new Cold War agenda

The intra-capitalist antagonism between the European Union and the United States is set to be extended with Donald Trump's return to the White House. Even greater and harsher intra-capitalist contradictions between the two economies will be made in the coming years, due to his predilection for tariffs. For instance, the Federation of German Industries, which represents 39 German industry associations of 100,000 businesses with 8 million employees, has concluded in a recent statement that Trump's tariffs "would harm not only Germany and the EU but also US economy".

In the same announcement, the Federation of German Industries has noted that Trump's "plans for new sweeping tariffs, as high as 10 or even 20 percent on all imports and 60 percent on imports from China, are a significant concern for German industry".Similarly, the Cologne Institute for Economic Research has estimated that Trump's tariff plans could cost the German economy up to 180 billion euros ($184.4 billion) from 2025 to 2028. In addition, Germany's Kiel Institute for the World Economy has accentuated the fact that there will be "profound economic losses", as it estimates a fall of over 0.5 percent in EU GDP and a decline in German output of 3.2 percent. In total, the earnings among a cluster of Europe's major corporations could fall by more than 5 percent in 2025.

Certainly, Trump's second term will affect EU policy as he will likely impose tariffs on every bit of European product entering the US market. Overall, he plans to implement a political agenda full of tariffs and protectionism, which is estimated to cut global GDP in 2025. It is worth noting the fact that the US' share of the global economy has shrunk from 26.12 percent in 1990 to 15.56 percent in 2023 in terms of purchasing power parity. According to Statista, a global data platform established in Germany, the US accounted for 15.56 percent of global GDP after adjusting for purchasing power parity. This share is expected to decrease to 14.72 percent by 2029, which is roughly one-seventh of the global total. In 2023, China's share was about 18.75 percent and it will be 19.64 percent by 2029.The US' ephaptic dwindling and/or shrinking share of the global GDP has prompted (among other things) to Trump's tariffs and, consequently, his policy of protectionism. As the new Trump administration resorts to protectionism with the aim of imposing strict US conditions on international competitiveness in the industrial and high-tech sectors, it is therefore not accidental that Trump's protectionism will weaponize tariffs against numerous nations. He even warns the BRICS nations that if they move away from the dollar policy, he will impose a 100 percent tariff in the US market. In the same way, he has warned the EU to buy more US oil and gas as a means of reducing its $208.7 billion trade surplus vis-a-vis the US; otherwise the EU will face high tariffs in the US market. Trump has also proclaimed that there will be a 10 percent tariff on global imports into the US as well as additional 25 percent tariffs on Mexico and Canada, and a 60 percent tariff on Chinese goods. Trump has also specified — via his Truth social media platform — that tariffs will be part of his first executive orders on Jan 20, the date of his inauguration, although he didn't detail the legal basis for these tariffs.

It is worth noting that in Davos in 2017, President Xi Jinping stressed among other things: "No one will emerge as a winner in a trade war." And he ended his speech in Davos with a call for cooperation in turbulent times. Besides, the Trump administration is expected to transfer to the EU nations the responsibility for military support for Ukraine and war preparations for a broader NATO-Russia conflict. Brussels is already moving cautiously in this direction. The recent report by Mario Draghi, former European Central Bank president, urges EU nation-states to focus on their own arms industries instead of buying weapons from the US; at present, about 63 percent of Europe's arms come from the US. Meanwhile, the new Trump administration may require NATO members to boost military expenditure to 5 percent of their GDP; this means more than doubling NATO's current 2 percent spending target. Such a requirement implies and/or fortifies a war economy. The US controls — through NATO and other means — over 55 percent of all military spending worldwide. Besides, the US has 750 military bases in an estimated 80 countries. Furthermore, the US military presence is profoundly concentrated in bordering regions and/or buffer zones surrounding China. Within this framework, opposing China's economic influence is central to the new Trump administration's economic agenda and, thus, it will also affect EU-China economic relations, not least, by the US coercing the EU's high-tech industries to decouple from parts of the Chinese market and infrastructure. In any case, Trump's second presidency will be more aggressive on China, not just in terms of tariffs.

Overall, the consequences of the new Trump administration will also have a massive effect on politics, emboldening far-right parties globally, namely the "Alternative for Germany", the Netherlands' "Freedom Party", France's "National Rally" and the "Brothers of Italy" in Europe, which adopt his viewpoint on immigration and national identity. In short, Trump will additionally weaken consensuses pertinent to the global equilibrium, multilateralism, energy and the environment, the Paris Agreement and transatlantic relations. His "America First "slogan is politically a synonym for US primacy and its hegemonic agenda via a new Cold War apparatus. The EU should recognize the dangers of this and work with China to build a global community of shared future.

The author is a former rector of the European University Cyprus, an ordinary member of the European Academy of Sciences and Arts and director of the CASS-EUC Center of China Studies. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.