In this policy paper, Elvire Fabry, senior research fellow at the Jacques Delors Institute, analyses the factors that will prevail in Washington’s initiatives et outlines two scenarios allowing to decipher the way in which these various parameters might be played out:
• An aggressive economic nationalism;
• A protectionist megaphone with limited disruption.
The Europeans need to seriously prepare a gradual response to Donald Trump’s protectionism, all the more that the European Union is more vulnerable than China. While the latest developments would argue in favour of a soft Trump, an aggressive scenario cannot be excluded, and call Europeans to prepare responses, notably:
- preserving multilateralism, by forging a broad coalition with Asia, Africa and Latin America against protectionism;
- avoiding a risk of divisions between EU member states by making a collective commitment to use trade defence instruments and by preparing a European harmonisation of corporate tax;
- and building consensus over European trade policy.