Europe warily eyes changes under incoming Trump administration

Top officials at the European Union say they are looking forward to deepening ties with the new U.S. administration. But behind the scenes, the EU has been preparing for what could be a very different relationship with its biggest trading partner. 

During Trump's first term in office, the bloc was caught off-guard by his tariffs on European steel and aluminum. This time, a taskforce has been in place for months preparing for the possibility of a more protectionist U.S. administration and the prospect of wide-reaching duties. 

Trump has threatened tariffs of up to 20 percent on all goods coming into the U.S. and has directly accused the EU of creating an unbalanced trade relationship. Trade between the U.S. and EU stands at roughly $1.5 trillion per year but Trump claims Washington is getting a bad deal. He's threatened tariffs unless Europe reduces the trade deficit and buys more U.S. oil and gas. 

The EU's trade surplus for goods stood at over $150 billion in 2023 but officials say that doesn't tell the whole story. 

"The EU has a substantial trade in goods surplus with the U.S., whereas the U.S. has a substantial trade in services surplus vis-à-vis the EU," said EU Commission Spokesperson Olof Gill. 

Trump has also threatened tariffs on EU member state Denmark unless it gives up the autonomous territory of Greenland citing national security concerns. EU officials say such threats are purely hypothetical and Commission President Ursula von der Leyen says she's committed to strengthening the Transatlantic bond. 

"We look forward to a positive engagement with the incoming U.S. Administration, based on our common values and shared interests. In a rough world, Europe and the US are stronger together," she added in a social media post. 

But that positive engagement might come at a cost. Trump has called for NATO allies in Europe to boost spending on defense to 5 percent of GDP compared to the current 2 percent benchmark. 

"We've been derelict in terms of what we spent on defense," said Simon Diggins, a former British Army officer turned military analyst. "I think what Trump has said not unreasonably is that 'If you expect us to support you, you expect the American umbrella to still be in place, the least you can do is pay for the support.'"

The incoming U.S. administration has also called for a quick resolution to the conflict in Ukraine and the EU says it's willing to step up if Washington won't continue its leadership role. But Ukraine's President Volodymyr Zelenskyy says Washington's support remains key. 

"President Trump is a strong man and I want very much to have him on our side, for me it's very important, I want to discuss with him more details about this war," Zelenskyy said at the European Council in Brussels last month.

With Trump promising an America First agenda, the international community is bracing for a more protectionist U.S. president.

French President Emmanuel Macron has warned Europe needs to work out how it might be caught up in what he says could be a possible "trade war" between the US and China. He calls the Trump election a "moment of acceleration" and says Europe can't delay in refining its own trade policies.