On 7 November, Jean-Pierre Petit, President of the Cahiers Verts de l'Économie, gave a lecture on the repercussions of Donald Trump's recent victory in the American elections. Trump's re-election is not just an upheaval in the American political landscape; it could well redefine transatlantic relations and prompt Europe to rethink its economic, energy and security strategies.
A ‘Red Sweep’ in the United States: political and institutional implications
Trump won the presidency with a large majority of electors, and the Republicans consolidated their control of the Senate. The House of Representatives is also set to become majority Republican. This political situation, which analysts describe as a ‘red sweep’, gives Trump a solid institutional base, enabling him to implement his policies without significant counterweight. This configuration paves the way for far-reaching reforms and governance based on conservative values, often at odds with those of many European countries.
American power: between domination and fragility
Jean-Pierre Petit pointed out that the strength of the United States rests on ten major pillars: economic, military, technological, financial, monetary, energy, commercial, normative, demographic and cultural power. Indeed, the United States continues to dominate the world in these areas, even if some indicators point to worrying weaknesses.
A failing healthcare system and persistent social challenges
The United States devotes 16% of its GDP to healthcare, a much higher level than in European countries. However, the results in terms of life expectancy are far from satisfactory, partly because of an obesity rate of 42% among adults and 20% among young people, as well as an opiate crisis marked by the spread of drugs such as fentanyl.
Education in difficulty and reduced social mobility
American educational performance, particularly in mathematics, is below that of many developed countries, which limits the development of human capital and potential growth. Intergenerational mobility remains low, held back by income inequalities and limited access to higher education for the underprivileged.
A property market under pressure
The US housing market is marked by a shortage of between 3 and 4 million homes. This situation is keeping property prices high, despite the rise in interest rates. Trump has also proposed a bold measure to free up federal land - around 12% of the national stock - to address this shortage, although its implementation remains uncertain due to administrative complexities.
Trump's economic programme: towards greater protectionism
Trump's economic strategy for his second term revolves around assertive protectionism and pro-business tax policies. In particular, he has proposed:
- An across-the-board tax of 10% to 20% on US imports to pay down the national debt.
- A specific 60% tax on essential Chinese products, including electronics, pharmaceuticals and steel. Trump is also considering restricting Chinese investors' access to US strategic infrastructure (technology, energy, agriculture).
- Making the 2017 tax cuts permanent, expiring in 2025, with a tax exemption on overtime and tips, as well as a reduced corporate tax rate of 15% for manufacturing companies in the US.
These measures are designed to bolster US self-sufficiency and curb the rise of China, particularly in the technology sector.
Growing pressure on Europe: dependence and strategic dilemmas
Europe's dependence on the United States is particularly visible in a number of areas: energy, technology, finance and security. This asymmetrical relationship exposes Europe to American decisions without it always having the capacity to respond autonomously. In terms of monetary policy, for example, higher interest rates in the US often mean higher rates in Europe.
Energy dependency
The crisis in Ukraine and the sanctions against Russia have increased Europe's dependence on American liquefied gas, while energy prices have rocketed. Europe has begun to react by diversifying its sources of supply and building up stocks, but it remains vulnerable to fluctuations in international prices, which are influenced by US energy policy.
Technology and innovation
In terms of technology, the United States largely dominates the key sectors, from artificial intelligence to semi-conductors. European initiatives, while laudable, have failed to close the gap with the United States, which continues to attract global capital and talent. Jean-Pierre Petit points out that Europe's slowness to react to the advances made by the US and China threatens its long-term competitiveness.
Confrontation with China: a key foreign policy priority
Trump's strategy towards China, initiated during his first term in office, looks set to continue. The Trump administration began by imposing tariffs on Chinese products, an approach that it intends to toughen with taxes of up to 60%. This trade war has given Europe a wake-up call in the face of Chinese mercantilism and prompted it to draw up protective measures for its strategic industries.
Technological and security competition
The United States and China are engaged in fierce competition, particularly when it comes to cutting-edge technologies. Trump's protectionist policy aims to limit China's access to American innovations, particularly in the artificial intelligence and semi-conductor sectors, an area in which Europe is largely dependent on American exports.
Europe at a crossroads: towards a strategic awakening?
According to Jean-Pierre Petit, one of the beneficial effects of the Trump presidency for Europe could be the strategic ‘awakening’ of Europeans, who are forced to realise their vulnerabilities. For several years now, Europe has defined itself as a ‘moral power’, advocating values of justice and human rights, but this moral stance has not translated into geopolitical power. In an increasingly competitive world, dominated by an ‘economy of conflict’, Europe must accept reality and develop defence mechanisms to secure its economic and strategic interests.
Trump embodies a break with traditional multilateralism, favouring a transactional approach in which international relations are treated like trade negotiations. This stance is bound to disturb Europeans, who are used to consensus-based diplomacy. Yet it also reminds European leaders that the world does not always operate according to the rules of ‘soft power’ and that power must be exercised in order to be respected.
Trump's second term: a test for Europe's strategic autonomy
In conclusion, Donald Trump's victory in the US presidential election could prove to be a major test for Europe. This election reminds Europe of its dependence on the United States. If it is to defend its interests in an increasingly polarised world, it will need to strike a balance between transatlantic cooperation and strategic independence.
