What Trump’s National Security Strategy Really Targets in Europe
Washington wants the EU to grant even greater access to US companies, testing the bloc’s regulatory autonomy and internal cohesion. A commentary by Lorenzo Bini Smaghi
The newly released National Security Strategy of the Trump administration has triggered highly emotional reactions, especially on this side of the Atlantic.
Beyond a few “touches of absurdity” — to borrow the Financial Times’ own words — several specific aspects of the document deserve closer scrutiny, particularly as regards economic relations between the United States and Europe.
The strategy contains a strong call for Europe to “open its markets to American goods and services, ensuring fair treatment for American workers and companies”.
The request is as striking as it is surprising, for several reasons. First, the European Union is already the world’s most open major economy in terms of international trade. Second, particularly in financial services and technology, the European market is already dominated by US firms, in some cases enjoying near-monopolistic positions.
Take, for example, the credit card-based payment system, where two dominant American players control payment data on millions of European citizens. Third, the call for greater openness from Europe comes at a time when the US administration has raised unprecedented trade barriers against the rest of the world — Europe included.
The document reflects long-standing grievances voiced by large US corporations against EU internal market regulation, which at times constrains their strategies of market penetration and commercial dominance.
Every fine imposed by European authorities on major US companies — whether for market abuse or tax avoidance — triggers an immediate backlash on social media, not only from the firms concerned but also from the White House. Any regulation aimed at safeguarding competition, consumer protection, or data privacy is portrayed as an affront to US interests.
Another noteworthy feature of the strategy is its explicit acknowledgement that financial institutions are the “pillars of American influence that afford policymakers significant leverage and tools to advance America’s national security priorities.” These institutions — from banks and asset managers to private funds and rating agencies — already hold dominant positions in European markets and do not hesitate to leverage them to influence the continent’s economy and politics.
This role has become increasingly visible, as illustrated by the participation of major US investment funds at the table of Ukraine peace negotiations — many of which, incidentally, manage European savings.
In short, the US administration is asking — or demanding — that Europe grant even greater space to American firms within the single market.
At the same time, the document warns that, left to its own devices, the European economy is destined to continue its decline: “Continental Europe has been losing share of global GDP — down from 25 per cent in 1990 to 14 per cent today — partly owing to national and transnational regulations that undermine creativity and industriousness.”
What the document conveniently overlooks is that the US has experienced a broadly similar development, despite more than doubling its public debt over the same period. According to International Monetary Fund data, the US share of global output (measured in purchasing power parity terms) has fallen to around 15 per cent. Both Europe and America have now been overtaken by China.
To compete with Chinese firms, US companies want access to ever larger and more accommodating markets. The European market is by far the most attractive, were it not for the obstacle represented by EU institutions.
An obstacle that, in the Trump administration’s view, can be easily overcome given Europe’s difficulty in forming a unified external front.
Indeed, a glance at the EU’s own website is enough to recall that “in foreign policy, the EU’s decision-making body is the European Council, which brings together the heads of state and government of the member states. Most decisions on foreign and security policy require unanimity.”
Europe carries little weight as long as its member states fail to agree among themselves. But each of them, taken individually, carries even less weight.
A first version of this article was published in the Italian daily Il Foglio
IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
