The EU-US Relationship: Let’s Be Friends Again

“We believe Europe is the world.”* It is unthinkable for a Washington politician to say anything remotely comparable to the words of the U.S. Secretary of State Dean Acheson (1949-1953). Yet after four complicated years of Donald Trump, there is hope that Joe Biden’s presidency will turn a new chapter in the U.S.-Europe relationship.

This does not mean a return to Barack Obama’s foreign policy, when Biden served as vice president. Biden will not use tariffs, insults, threats, or descriptions of the European Union as an enemy, yet the continent and the U.S. still have differences on a myriad of issues, from digital taxes and trade to 5G. The EU could no longer hide behind America’s back in terms of defense and security even before Trump came to power. Guy Verhofstadt, a former Belgian prime minister and current member of the European Parliament, writes in the EUobserver: “Biden’s presidency [is] no quick fix, just [a] chance for EU to fix itself. … There is only a trans-Atlantic partnership if Europe is big enough to be a partner.”

Biden: A New Beginning

“Calamitous, cataclysmic, catastrophic, pathetic” is how Francois Heisbourg, a special adviser at the Paris-based think tank The Foundation for Strategic Research, describes Trump’s foreign policy. This explains why Biden’s victory caused a palpable sense of relief emanating from many European capitals, with the Eastern exceptions of Bratislava, Budapest and Warsaw.

Yet a different analysis saw Trump’s European policy as a chance for a much needed, if uncomfortably rapid, course correction. Whether this opportunity has been embraced is unclear. It is quite possible that the revolutionary creation of a 750 billion euro European coronavirus fund, financed by a common borrowing, would not have occurred without a European sense of fending for itself. It is beyond doubt that French President Emmanuel Macron’s doctrine of “strategic autonomy” for the European Union, a doctrine including political, economic and military independence, has been embraced by Brussels. Talk and action are not the same, however, and James Carafano, a foreign and defense policy expert at the Heritage Foundation, observed that Europe “used Trump as an excuse not to address serious fundamental issues.”

Next to Trump, Biden looks like a romantic and a transatlantic internationalist, but European joy at Biden’s election is tempered by prudence. What will Biden ask of Europe, especially if given the freedom of not running for reelection? And what will happen if Trump’s brand of populism and his 70 million supporters find a new standard bearer in four years?

Biden’s hands could be tied by a hostile Republican Senate, a Senate that only recently did its best to block all of President Obama’s policy initiatives. Furthermore, Biden’s focus will beam inward as his advisers claim that the president-elect will spend 80% of his time on internal matters — an understandable allocation given a country swallowed by a pandemic, deeply divided and rocked by an economic crisis. France’s Minister of State for European Affairs Clément Beaune tweeted, “It’s a mistake to believe things have changed — Europe must rely on itself.”

Different Yet the Same

What could the EU expect from Biden beyond a predictable friendliness and a return to conventional support for international agreements and organizations? Biden believes in Western values and will not try to break up the EU or use Britain to do so. But a golden age in trans-Atlantic relations is unlikely.

Common ground between the EU and the U.S. will be found on climate policy — Biden has promised to rejoin the Paris Agreement on day one. The new administration sees climate change as a serious threat and a gradual movement away from oil and gas was a part of Biden’s presidential campaign.

Biden will not question NATO’s usefulness and will certainly not describe it as “brain dead,” yet 2% is still 2%. In other words, NATO member states, Germany especially, will be politely poked and prodded to increase their defense spending and commitments.

Biden does not share Trump’s fixation on trade deficits, including the trade deficit with Germany, which means there is no danger of new tariffs on European cars. Current tariffs on European steel and aluminum are likely to be eliminated. The long-running dispute of 16 years regarding subsidies for Boeing and Airbus, a conflict that caused American tariffs on European goods and reciprocal European tariffs, is likely to be resolved once Biden assumes office.

Even if a trade war has been avoided, a return to the spirit of Obama’s failed Transatlantic Trade and Investment Partnership agreement is unlikely. Smaller-scale agreements will have a better chance of approval from a Congress with a protectionist tilt. “However, in those negotiations, the United States is likely to be even more demanding and less flexible than, say, under Obama or George W. Bush on account of the domestic and international changes we have outlined, especially the mounting rivalry with China which will persist as the main point of reference in geopolitics, ” Uri Dadush and Guntram Wolff wrote in Bruegel magazine.

The technological sector is an area ripe for conflict. Brussels and Washington do not see eye to eye, as a failed bilateral agreement on data protection has laid their major differences bare. There has also been American pressure in regard to 5G matters.

There are fundamental differences concerning U.S. tech giants’ tax burdens: Facebook, Google and Amazon are all American companies. Some European countries, including France, believe these corporations are dodging their tax obligations; Washington believes taxes on the above would be an unfair punishment on American industry. There is hope that this could be solved on an international level through the Organization for Economic Cooperation and Development, but Paris may not be content to patiently wait and is expected to levy its own digital tax beginning in 2021. Trump’s administration has threatened to respond with retaliatory tariffs. There is no evidence to suggest that Biden’s team will have a fundamentally different approach. Even if the change in the White House leads to a less hostile environment, especially concerning tariffs, the possibility for escalation will remain.

China will remain Europe and the U.S.’ most controversial subject. Biden, as well as both Democratic and Republican political elites, believe that the world’s second-largest economy remains the biggest threat to American interests. Brussels has described China as a “systemic rival” yet there is also a distinct lack of European unity. Germany is least inclined to see its relationship with China in such hostile terms, as Berlin is linked to Beijing through massive amounts of trade. It is unclear if the 5G hardware bans on Huawei hardware in Europe will be supported — it is unsettled whether the EU will choose America’s side and stand against Beijing’s influence. Biden’s election has not brought clarity to this issue.

A honeymoon may be unlikely as the biggest risk to the EU-U.S. relationship is for Europe to end up “reverting back to its comfort zone,” Nathalie Tocci, an adviser to the EU’s foreign policy chief, Josep Borrell Fontelles, wrote. She continued: “Biden is a comfortable way of sticking our heads in the sand, but we must realize that the hard and painful choices Trump presented us with remain unchanged.”

*Editor’s note: This quote, though accurately translated, could not be verified.