When Donald Trump was sworn in as president of the United States for a second time a year ago, European leaders felt prepared. After all, they had dealt with Trump’s unpredictability during his first term, while the prospect of his return had been widely discussed in the media, with analysts drawing up scenarios and assessing the potential implications for Europe.
Yet, few anticipated the speed and breadth with which the new Trump administration would strain an already fragile trans-Atlantic relationship, pushing a traditional alliance rooted in shared values in a more transactional direction guided by an “America first” worldview. Trade partnerships, security alliances, and political coordination have been increasingly treated as bargaining chips.
For Europe, 2025 raised urgent questions about its relations with the US, as the trans-Atlantic schism widened and changed.
Over the past 12 months, Washington has repeatedly caught the continent off-guard, from threatening unilateral tariffs on “Liberation Day” to shifts in alignment over the Russia-Ukraine conflict, culminating in a provocative lecturing on Europe’s internal policy in the US National Security Strategy paper.
Published in early December, the 33-page paper adopted unusually harsh language toward its allies, making explicit attacks. It denounced the European Union’s transnational regulations as undermining sovereignty, claimed its migration policies were creating strife, and railed against government censorship of free speech and suppression of political opposition, parroting the tone of US Vice-President JD Vance’s speech at the Munich Security Conference in February.
Moreover, the paper stated that US policy should prioritize “cultivating resistance to Europe’s current trajectory within European nations” as well as “opening European markets to US goods and services and ensuring fair treatment of US workers and businesses”.
It also demanded a structural shift in Europe’s role within the alliance system, insisting that European states take responsibility for their own defense, abandon the expectation of an expanding NATO, and dramatically increase their defense spending.
“Certainly, this strategy continues to speak of Europe as an ally. That’s good,” European Council President Antonio Costa said on Dec 8, responding to the strategy paper. “But if we are allies, we must act as allies. And allies do not threaten to interfere in the democratic life or the domestic political choices of these allies.
“We need to focus on building a Europe that must understand that the relationships between allies and the post-World War II alliances have changed,” he said.
A European Parliament research report also pointed out that the strategy constitutes “a fundamental break with the consistent assessment of previous US administrations” that permanent global dominance by the US is in the country’s best national interest. Instead, it seeks to eliminate “global burdens” that it claims have been a drain on US resources.
Tariff tensions
This shift did not emerge overnight; it has been developing over years, nowhere more clearly than in the Trump administration’s trade policy.
During his first term, from 2017 to 2021, Trump was already vocal on the trade imbalance with Europe, describing the EU as a “foe” on trade and claiming it was “formed in order to take advantage of the US”.
Trade tensions between the US and the EU regarding steel and aluminum imports in 2018 were soothed with a quota system allowing a certain volume of EU steel and aluminum into the US duty-free. However, less than a month into his second term, Trump announced the return of tariffs on all steel and aluminum imports and the elimination of previous exemptions for allies, including the EU.
On April 2, the so-called Liberation Day, Trump imposed a blanket 10 percent tariff on all imported goods with higher, individualized “reciprocal tariffs” on dozens of countries.
Again, Europe was not spared. The EU’s 27 members were hit with a 20 percent blanket tariff, while other European countries, including Switzerland, faced even higher rates.
European Commission President Ursula von der Leyen vowed retaliation, though remaining open to negotiations. The EU first announced retaliatory tariffs on 26 billion euros ($30.61 billion) worth of US goods, and later added more US products to the potential retaliatory list, including passenger cars, medical devices, and agricultural products, totaling nearly 100 billion euros.
“Unjustified tariffs on the EU will not go unanswered,” von der Leyen said. “They will trigger firm and proportionate countermeasures. The EU will act to safeguard its economic interests.”
The two sides then engaged in trade talks. Whenever negotiations stalled, Trump pressed with new tariffs and higher rates; when the EU offered concessions, Trump delayed the deadline.
After months of talks, Trump announced a US-EU trade deal on July 27 following a round of golf at his luxury Turnberry resort in Scotland. Despite von der Leyen describing it as “a huge deal” that would bring “stability” and “predictability” to both sides, its lopsided terms were apparent.
Under the framework agreement, the EU accepted a 15 percent tariff on most of its goods entering the US — the previous rate averaged out at 4.8 percent — while agreeing to eliminate tariffs on all US industrial goods and provide preferential market access for a wide range of US seafood and agricultural products.
The EU also promised to purchase US oil and gas worth $750 billion over the next three years, and European companies were expected to invest $600 billion across strategic sectors in the US.
However, the agreement provided little relief. German Chancellor Friedrich Merz said it would “substantially damage” his nation’s finances, but conceded that “we couldn’t expect to achieve any more”. Francois Bayrou, then French prime minister, wrote on X, “It is a dark day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission.”
Tech war
While some leaders praised the agreement for stabilizing the trans-Atlantic partnership, they failed to confront Trump’s narrative that the objective of the EU-US trade negotiation was to address an unbalanced relationship, without referencing the large US surplus in services trade with Europe, especially the lucrative tech sector.
In 2024, trade in goods and services between the US and the EU stood at 1.68 trillion euros. Although the EU had a surplus of 198 billion euros over the US in trade in goods, it ran a deficit of almost 148 billion euros with regard to trade in services.
The top services the EU imports from the US include charges for the use of intellectual property; professional, scientific, and technical services; and telecommunications, computer, and information services.
In the digital sphere, the US and the EU have also engaged in another war over regulations and market access.
Since 2022, the EU has introduced and updated the Digital Services Act and the Digital Markets Act to tighten the operation of big tech companies in Europe. Authorities have since imposed fines ranging from millions to billions on Apple, Meta, and Google for abusing their dominant market positions.
The most prominent cases were a 1.8 billion euro fine on Apple for abusing its dominance regarding the distribution of music streaming apps to iPhone and iPad users through its App Store, and a 2.95 billion euro fine on Google for breaching EU antitrust rules by distorting competition in the advertising technology industry.
Understandably, Trump hit back immediately, writing on his Truth Social platform, “Digital taxes, legislation, rules or regulations are all designed to harm, or discriminate against, American technology.”
Tom Wheeler, former chairman of the US Federal Communications Commission, described it as “digital mercantilism” in a commentary published by the Brookings think tank in Washington.
“American tech companies have largely avoided meaningful regulatory oversight in the United States,” he wrote. “Now, President Trump has pledged to ‘stand up’ to countries that ‘attack’ them. This use of political power to protect favored companies can be seen as a modern-day version of mercantilism.”
More recently, the United States Trade Representative warned of retaliation after the EU handed out roughly $140 million in fines to social media platform X — owned by the US billionaire Elon Musk — for violating digital transparency rules.
“If the EU and EU member states insist on continuing to restrict, limit, and deter the competitiveness of US service providers through discriminatory means, the United States will have no choice but to begin using every tool at its disposal to counter these unreasonable measures,” the trade representative’s office said on Dec 16.
It singled out potential European service providers that could be targeted by name, listing Accenture, DHL, Mistral, SAP, Siemens, and Spotify, among others.
Analysts said the tensions are unlikely to ease, given the growing dominance of nationalist politics in the US and their divergence from Europe’s traditional political consensus.
Idealism to realism
Cui Hongjian, director of Beijing Foreign Studies University’s Center for European Union and Regional Development Studies, said that the US-EU trade war reflects a broader shift in the US’ worldview — from idealism to realism.
“Trump emphasizes direct and measurable benefits, but the returns that Washington believes it receives from its long-term investment in the trans-Atlantic alliance with Europe are increasingly seen as unclear,” Cui said. “At the same time, the US and Europe remain competitors in many economic areas.
“Against the backdrop of what can be described as US hegemony anxiety, the administration is seeking to redistribute burdens and benefits among allies through a realist lens, prioritizing national interests over shared values or idealistic assumptions,” he said.
Security spending within the NATO military alliance has long been viewed in Washington as one such burden. Calls for Europe to shoulder a greater share of defense costs date to when Barack Obama was the US president, though with limited results.
During his first term, Trump demanded that NATO allies raise defense spending to 4 percent of GDP. In his second term, he has pushed that target even higher to 5 percent.
With the Russia-Ukraine conflict entering its fourth year, Trump has increasingly used it as leverage to pressure EU and NATO allies on defense budgets — at times threatening to halt US support for Ukraine and warning that Washington would not “protect” countries that failed to meet their financial commitments.
This time, the allies agreed. At a summit in The Hague in June, NATO member states committed to increasing defense spending to 5 percent of GDP over the next decade, including 3.5 percent in core military expenditure, with the remainder allocated to infrastructure such as intelligence, cybersecurity, and related areas.
“By shifting the security burden in Europe, the US is freeing up resources to focus on the Western Hemisphere, a revival of the logic behind the 19th-century Monroe Doctrine,” said Ding Chun, director of the Center for European Studies at Shanghai’s Fudan University. “However, Trump’s equivocation over NATO’s mutual defense clause has also made the US appear to be a less reliable security partner for Europe.”
There was still a growing dependence on US arms imports. Data from the Stockholm International Peace Research Institute show that 64 percent of weapons imported by European NATO member states between 2020 and 2024 came from the US.
At the same time, Europe has begun to push back. In March, von der Leyen proposed a 150 billion euro defense loan for joint defense procurement restricted to European-made weapons. In September, Germany signed 83 billion euro worth of defense contracts awarded directly to European companies, leaving “almost no space” for US suppliers.
“Europe is now seeking a balance,” Cui said. “In the near term, the bloc remains deeply tied to the US. But in the longer term, it is preparing for the possibility of a US withdrawal.”
From trade to defense, the first year of Trump’s second term has further shaken the foundations of the trans-Atlantic relationship and forced leaders across Europe to adapt to a new trans-Atlantic reality.
Manfred Elsig, a professor of international relations at the University of Bern, Switzerland, told Politico, “Trump has eroded the most important political capital in the trans-Atlantic cooperation: trust — the bedrock of the post-World War II partnership between the US and Europe.”
Sun Chenghao, head of the US-EU program at Tsinghua University’s Center for International Security and Strategy, said in his reflection after attending last year’s Berlin Foreign Policy Forum: “Europe’s dissatisfaction, anxiety, and dependence will continue to shape the next stage of trans-Atlantic relations. … It will likely lead to a relationship that becomes ever more transactional, more realist, and ultimately more fragile.”
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