Source: Oliver Der Standard
When Joe Biden won the presidency in 2020, he had a clear message for European leaders: “America is back”. After four long years of Donald Trump, during which he plunged US foreign policy into isolationist protectionism, frequently attacked EU leaders, above all Angela Merkel, and went as far as publicly calling the EU a “foe”, Europeans had come to question the United States’ commitment to maintaining its position as the leader of the free world. Biden’s victory over Trump was thus met with a clear sigh of relief in Brussels, with leaders eager to work with the new US President on key common issues such as addressing climate change, strengthening the transatlantic military alliance, and deepening economic ties.
Close to two years into Mr. Biden’s presidency, however, it is clear that the EU’s hopes that Trumpism would fade and the US would abandon its America First doctrine were premature. In addition to the serious threat of Mr. Trump returning to the White House in 2024, EU officials have been unsettled by policy decisions made by the Biden administration which they see as harmful to the transatlantic partnership. The botched American military withdrawal from Afghanistan in August 2021, for example, was criticized for having been conducted without consultation with NATO allies and, according to the chair of the German parliament’s foreign relations committee, Norbert Röttgen, did “fundamental damage to the political and moral credibility of the West” (POLITICO). Later, in September, French President Macron was outraged by Australia revoking a $66 billion submarine contract with France in favor of working with the US and UK, going as far as recalling the French ambassadors to the US and Australia.
Despite the intense amount of media attention generated by these events, it is worth noting that they represent above all communication and operational mistakes made by the administration, rather than fundamental conflicts. Biden not only apologized for the blunders and committed to closer strategic cooperation, but also made use of his decades of experience as a foreign policy heavyweight by rallying NATO allies in response to the Russian invasion of Ukraine and imposing unprecedented, wide reaching sanctions. By launching a joint Task Force on Energy Security in March 2022, Biden further demonstrated his attempt to help reduce European countries’ reliance on Russian gas by committing to deliver an additional minimum of 15 bcm of LNG gas to the EU, arguably harming his own domestic energy policy strategy (The White House).
Nevertheless, EU officials must not become shortsighted by taking Biden’s pledges to Europe for granted. Especially with the United States facing significant economic competition from China as a growing global superpower, American politicians have become increasingly hesitant to publicly promote compromises with the EU, especially in the age of Trump. Notably, trends of economic protectionism have not been restricted to the Republican party’s platform, but have also become more widespread among Democrats. Promises to blue-collar, working-class voters that “the future will be made in America” and that taxpayer dollars would be spent on the domestic industry have not gone unnoticed in Brussels.
Most recently, this materialized in the Inflation Reduction Act, a wide-ranging piece of legislation that was passed as a compromise with Senator Joe Manchin of West Virginia on a strictly partisan basis. Although it was stripped of many of Mr. Biden’s original proposals, among them paid family leave and free community college, it made record investments in areas including climate action, prescription drug price reduction, and tax reform. Its $369 billion spending on climate has been hailed as the most significant climate investment in US history, with the long-term effect of reducing greenhouse gas emissions to 40% below 2005 levels by 2030 - effectively “eliminating the annual planet-warming pollution of France and Germany combined” (Bloomberg).
Although EU leaders were initially delighted to see meaningful American action on climate change, especially after years of inaction by Congress, analysts identified key provisions in the legislative text that stoked fears in Brussels over a potential trade war with the United States. Given that the subsidies and tax credits introduced in the Act are restricted to products made in the US, or companies operating there, Europeans are concerned that it risks leading to a global race to the bottom on clean energy incentives. Further, the European Commission argues that the measures “contain provisions with clearly discriminatory and domestic content requirements, in breach of WTO (World Trade Organization) rules” (Financial Times). French President Macron has raised particular concerns, as France estimates to lose €8bn in investments from domestic operations being incentivized to relocate to the US (Financial Times).
Given that similar tax credits and clean energy incentives in Europe do not discriminate against American manufacturers, officials in Brussels have warned that the IRA risks “creating tensions that could lead to reciprocal or retaliatory measures”. French lawmakers have suggested introducing a retaliatory “Buy European” Act to protect the local carmaker and energy industry by reserving subsidies for European manufacturers: “You have China that is protecting its industry, the U.S. that is protecting its industry, and Europe that is an open house” (POLITICO).
Escalating a trade war between the US and EU in current times of international geopolitical unrest would, ultimately, however, be damaging to both parties. Dictators like Vladimir Putin and Xi Jinping would be thrilled to capitalize on Western infighting by further attempting to unravel the transatlantic alliance. President Biden frequently argues that we are “in a battle between democracy and autocracy”. Democracies should not allow autocracies to gain the upper hand by dividing their strategic alliance and losing sight of the bigger picture.
Ultimately, the European Union must learn the lesson that they cannot continue to rely on American goodwill indefinitely. Although Donald Trump may have done permanent damage to himself politically, the populist forces that propelled him to the White House in 2016 have not waned. Europe must be prepared to cope with the continued implementation of ‘America First’ agendas in the future.