The Bureau conversations in February and March 2025 were devoted to the question how to navigate the geopolitical and global economic instabilities and uncertainties originating from Trump’s White House. The lead speaker argued that the actions from Trump 2.0 could be interpreted both as transactional negotiation tactics and/or a reflection of more fundamental transformative strategies.
From a transactional perspective, many of the threats and outright blackmail efforts could be seen as bullying actions to extract a better deal from friends and foes alike. In such a scenario, standing firm and offering improved terms of trade in real and symbolic ways, combined with shameless flattery to the “fairly stable genius and universal master of the deal”, could go some way to ease dangerous tensions and avoid rocking up costs of escalating chickens` games. The lead speaker opined that such a course of action has proven quite effective during the first Trump administration, pointing inter alia to the Trump-Juncker agreement from July 2018; and she argued that the “tariff games” so far are compatible with a relatively benign interpretation. She also remarked that the bilateral current account between the US and the euro area is broadly balanced, thus offering a good range of retaliation threat points. Several participants concurred and discussed possible elements of a bargaining deal in various areas/sectors, including defence and trade in goods and services. However, discussants unanimously cautioned that this time could be different, with the US side now having significantly upped the ante.
Thus, the transformative nature of the Trump 2.0 reign must not be underestimated as several restraining factors, including US domestic checks and balances, are no longer in play this time. In consequence, Europe will have to live up to a host of new challenges. With the transatlantic alliance as we know it likely coming to an end, and significant hostilities in terms of economic warfare appearing on the geo-strategical horizon, the EU and European nation states are scrambling to come up with an appropriate response. Participants discussed strategic policy adjustment needs in several areas: (i) managing rearmament requirements, including missile shields and tactical nuclear weapons, and the relation to industrial policies and the single market; (ii) opening up new financing channels for defence and other common public goods at national and supra-national level; (iii) pursuing the green transition and upholding the social contract in the face of fresh trade-offs and constraints; and (iv) safeguarding European unity and ensuring democratic support in difficult times, when hard trade-offs between welfare and warfare may emerge.
While participants generally agreed that Europe has what it takes to defend its genuine way of living and to sustain its limited, albeit certainly not insignificant, role in global affairs, there was also broad consensus that established partnerships and alliances, in particular NATO, should not all too easily be written off; on the contrary, political capital and diplomatic efforts should be invested into new forms of maintained and renewed co-operation both at the global level and in multi-lateral settings. And clearly, Europe will eventually have to do its homework, strengthening its overall resilience, its innovative capacity and the domestic single market.
Concluding, the chairman argued that the good hegemon going astray in the personification of President Trump may have been an accident in waiting for Europe and the post-World War II international order, threatening a re-emergence of imperial power politics akin to past centuries. For Europe, this constitutes a wake-up call that could hardly be missed. He expressed his reasoned hope that in the 21st century Europeans will find a co-operative democratic answer rather than fall back into the dark history of nationalistic autocratic regimes in a divided continent.
End note: The term "good hegemon" is used in the title of Susan Park's book "The Good Hegemon: US Power, Accountability as Justice, and the Multilateral Development Banks", Oxford University Press 2022. In the context of the Bureau conversations, it refers to the notion that the US, while certainly always guarding its own interests - and sometimes in a quite ruthless manner -, have exercised their role as a long time fairly undisputed world hegemon in a relatively civilised way, at least from a Western European perspective.
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