Trump Says “Jump,” the EU Asks How High

The unconditional surrender came with a warning. After the start of the war in Ukraine, the European NATO countries announced their willingness to invest 2 percent of GDP into armaments in future. Three years later, a 5 percent target suddenly applies. Henceforth, Germany will invest every second euro from the federal budget toward purchasing weapons and a war-ready infrastructure, as it seeks to build — as Chancellor Friedrich Merz put it — the “strongest conventional army in Europe.” Were there new risk assessments behind this? Is Russia suddenly 2.5 times more threatening than it was after the invasion of Ukraine? Of course not. The logic is as banal as it is telling: Trump demanded 5 percent, so the Europeans are paying 5 percent. What this does serve is a transatlantic division of labor directed against China.

Given that large segments of the arms spending will fill the coffers of the biggest weapons manufacturers, which happen to be American, this amounts to a major military-Keynesian stimulus package — for the United States. Furthermore, the Europeans thus gave Trump the chance to carry his “dealmaking” to Japan, the Philippines, Australia, and New Zealand, asking them to spend just as much and boost the American military-industrial complex some more.

One would assume that with so much goodwill and transatlantic alliance loyalty, the Europeans would now be able to secure a positive “deal” with Trump. He makes “deals,” quid pro quo. Accordingly, the German government said that massive rearmament was intended to appease Trump in the trade dispute — and dissuade him from imposing high import tariffs on the EU. This was announced by Foreign Minister Johann Wadephul.

The avowed transatlanticist Merz traveled to the United States early in June and curried favor with the president — who has threatened war from Greenland to Panama, wants to annex Canada, and launched war on Iran. Merz presented him with a special golf club and a birth certificate of Trump’s German grandfather, and spoke of the two men’s “good rapport.”

Former dutch premier Mark Rutte, today NATO’s secretary-general, also distinguished himself as particularly obsequious in a personal message leaked by Trump himself. However, if Europeans hoped that their displays of affection would be reciprocated by the United States, they were soon being disabused of that notion. Essentially, the NATO “deal” was simply the foreboding of the second unconditional surrender, which happened this week.

In mid-July, Trump first announced a general tariff of 30 percent on imports from the EU, in addition to existing industry-wide tariffs. The tariffs were to come into effect two weeks later, on August 1.

Unequal Treaty

When Trump arrived in Turnberry, Scotland, where he was to meet European Commission president Ursula von der Leyen, he announced that the meeting would take an hour at most. He had other important things to do, like a few rounds of golf. The meeting was in fact that short, before Trump and von der Leyen told the media about their agreement. The European Commission had committed the bloc to spend around $1 trillion on arms, to relieve the Americans in their attempt to contain China. Some of those weapons are to be gifted to Ukrainian president Volodymyr Zelensky, in his by now unwinnable war of self-defense — and increasingly, forced recruitment — which will nevertheless presumably end with the Russian president dictating the terms of peace.

The EU leadership also wanted to thank the United States for presumably having torpedoed the Nord Stream II strategic energy infrastructure, which thus hobbled Europe’s purchases of gas from Russia. It now committed to buying US fracking gas, to the tune of 750 billion, stretched over the next three years. Finally, the EU pledged massive foreign direct investment in the United States, to the volume of $600 billion.

It remains unclear how the European Commission is supposed to force private, for-profit corporations to commit to offshoring production to the United States. At the same time, given the vast difference in industrial energy prices on either side of the Atlantic — German energy prices, for instance, are roughly triple US and seven times Chinese levels — no extra incentives for capital relocations are necessary.

Joe Biden’s Inflation Reduction Act with its local-content requirements, the massive tax cuts for the top 1 percent embodied by Trump’s “Big Beautiful Bill,” and environmental deregulation for even cheaper energy are just enough incentives for even more massive capital flight from Europe’s most energy-intensive capitals, especially in industrial manufacturing and the pharmaceutical industry. Two consecutive years of negative growth in Germany speak volumes.

In exchange for such generous gifts presented to Trump by EU officials, US capital gets to export to the European Common Market for free — the EU has “opened up its countries at zero tariff,” Trump bragged — while EU-based businesses seeking access to the United States domestic market must pay import taxes of 15 percent. That’s just the basic rate; various sectors like the EU steel and aluminum industries face devastating 50 percent tariffs.

This was the “deal.” After having wiped the floor with von der Leyen, Trump shared the stage with her to announce it, and EU leaders stood for a press photo with the broadest smiles and all of their thumbs up. In truth, this was not a deal at all but Europe’s formal “Declaration of Dependence.” Trump, who never shies from superlatives, could justifiably call it “the biggest one of them all.” He had imposed on Europe the same kind of “treaty” that the European powers forced China to swallow after the Opium Wars.

Von der Leyen spoke of a “good deal,” having avoided Trump’s maximalist demand of 30 percent tariffs; German chancellor Merz praised this as better than expected, lauding her tremendous negotiating to protect German carmakers and pharmaceutical companies from even more harm. True, German interests were considered — which is why figures in other EU member states are now rightfully complaining that they only got into this mess because of Germany’s current-account surpluses vis-à-vis the United States. Still, it is also not a good deal for German capital. The original tariffs paid by German auto companies were around 2 percent. A 13 percentage point increase hardly spells out promising prospects for an already ailing industry.

European Dependency, Times Four

Europe’s two unconditional surrenders reveal the real relationships of forces in the world economy of today. The ultimate question is: Why did Trump succeed vis-à-vis Europe with the same strategy that failed so miserably vis-à-vis China?

Trump is well known for his transactional approach to politics, making deals based on his poker hand. When he faced China, Trump had no trump cards to play. Beijing had all the aces up its sleeves: Retaliatory tariffs of 125 percent, export restrictions on rare earths — on which US automotive and defense companies depend — import restrictions on Hollywood films, import bans on Boeing aircrafts, and special sanctions against US companies. Anyone who expected China to back down in the US trade war was proven wrong.

Instead, it demonstrated its strength. Trump was forced to retreat. After Trump 1.0’s and Biden’s protectionist measures against Beijing, this showed China’s newly gained economic sovereignty — and the massive shift in the world economy’s balance of forces, from the North and West toward the East and South. It showed the limits of the US’s attempt to decouple China — the largest trading partner to more than 120 countries — from the rest of the world.

Europe’s second unconditional surrender shows the major shift in the transatlantic balance of forces. Obviously, when the United States announced a “partnership in leadership” for Germany and the Europeans after the end of the old Cold War, there remained a gap in their relative strength. Yet, the United States took the EU empire seriously. George W. Bush’s attempt to control the global oil spigot against all potential rivals was also directed against the EU. At the time, through Eastern enlargement, the EU was becoming the largest common market in the world, wielding the new common currency, the euro, as a potential alternative to the dollar. Hence, the American Empire successfully saw to it that no eastern European enlargement occurred outside the United States’ own NATO power-structure over Europe.

The Ukraine war intensified the imbalance in North-Atlantic power relations. From it has emerged a new asymmetrical transatlanticism and a four-fold European dependency on the United States.

First, the cancellation of the European-Russian energy symbiosis has made Europe dependent on US fracking gas and US-controlled liquified-natural-gas terminal infrastructure.

Second, the EU has been economically weakened and made dependent onto the US domestic market, which Trump now leverages so successfully to blackmail the Europeans. This is not a new idea: it is precisely how Ronald Reagan forced the Japanese rival into total surrender in the 1980s, effecting decades of slow growth. The EU economy and especially Germany’s export economy is in a shambles today, with few growth expectations despite the massive military Keynesianism. Europe’s new dependency on US fracking gas is not only a climate disaster compared even to Russian gas and oil but also much more expensive. Furthermore, the EU’s elites have weakened the European economy with eighteen rounds of anti-Russia sanctions that have only backfired, having overestimated European strength.

The United States’ economic warfare, which seeks to decouple Europe from China’s huge domestic market through the politicization of supply chains — including by sanctioning private companies from Europe when they trade with China using American components — has made the leverage of access to the equally huge US domestic market even more powerful. Indeed, the United States actually replaced China as the biggest export market for Germany in 2024 for the first time since 2015.

Third, the EU has also become geopolitically dependent on the United States. In the new bloc confrontation, which the US state is seeking to impose onto the world, the biggest fish is the one that has seven-hundred military bases around the planet and controls global NATO as the largest military alliance. On this basis, the United States is aggressively seeking to safeguard Western dominance in a fundamentally shifted world economy.

Fourth, the attempt to use military prowess as the last resource of supremacy means that the country that benefits is the one that harbors the world’s five largest arms manufacturers — and not the EU. In other words, added to Europe’s energy, economic, and geopolitical dependency there is also a military-technopolitical dependency. The “deal” dictated by the United States to its European vassals merely lays bare this asymmetrical transatlanticism.

Another Way

So, weren’t there alternatives? In the short term, EU elites could have thought about the trump cards they held. Yet, taxes on American IT and platform-capitalist monopolies were scrapped even before the negotiations started. EU leaders played nice, hoping for mercy.

In the long term, EU elites could have resisted the United States’ redivision of the world. They could have independently sought to de-escalate the war in Ukraine. There have been plenty of opportunities. Precisely in order to pursue its own interest, the EU could have sought a new peace and security arrangement for Europe and Asia, including Russia and China. Instead, its elites immersed themselves in a fantasy world of impending Russian invasions and a new arms race, which will turn Europe upside down economically, socially, politically, and culturally.

Yes, Europe’s dependence on the United States is undoubtedly significant; Washington’s resources to punish a European declaration of independence are not to be underestimated. But it is also true that the United States’ power around the world is waning.

The EU was not well-advised to let the United States push it into economic and military confrontation with China. It appears that the Europeans share more common interests with China and even the Global South. EU elites could have accepted the new multipolarism as a fact — and taken the initiative to help create the new multilateral world order that prevents its multiple risks regarding economic and other wars. EU elites could have seen the rise of BRICS as an opportunity. Yet, European states joining BRICS was out of the question.

Entering into a “systemic rivalry” with Beijing in 2019, and pursuing this line ever since, meant siding with the American big brother. It also meant standing and falling with the United States’ attempt to block the rise of China and the Global South. Isolated in the world, European leaders were at Washington’s mercy.

Yet the United States proved that it is not a big protective brother. It has shown Europeans the bullying face that it has been showing around the world for at least a century. With the new asymmetric transatlanticism, Europe gets treated as a vassal. To make their humiliation complete, European leaders keep on smiling because they think that whoever says “a” must also say “b.” However, as Bertolt Brecht taught, this is untrue: we can also recognize that the first assumption “a” was wrong. Yet to recognize that, it will take other leaders, emanating from a quite different political balance within Europe itself.