Before Trump had even been confirmed as the 47th President of the United States of America, one European think tank had declared that “the biggest crisis in transatlantic relations since Suez” is in progress. An EU bureaucrat echoed the same sentiment: “Are there any EU-US relations left?” Panic is ripping through the halls of power in Europe.
It’s not hard to see why. Trump has threatened 20 percent tariffs on all European imports; has promised a deal with Putin to end the Ukraine war; has threatened to annex Greenland from fellow NATO member Denmark; and has demanded European NATO members raise their defence spending to five percent of GDP or else watch as the US walks out of the military alliance. It was also noteworthy that the only European office holder to receive an invite to his inauguration ceremony was Italy’s Georgia Meloni, although many leaders of so-called ‘far right’ and eurosceptic parties were in attendance by special invitation.
All of this flows from Trump’s strategy, which represents a break with the policy of US imperialism since the postwar period. The problem is, the European capitalist class has built all its fortunes on this policy, namely: of US imperialism maintaining, at any cost, its status as the world’s all-dominating economic and military superpower, the supreme arbiter of what is today called ‘the rules-based world order’.
Every US president since the fall of the Soviet Union has, up until now, tried to maintain full US dominance in the world. But that increasingly stands at odds with stubborn material facts. Trump is adamant that these cannot be ignored any longer without placing US imperialist interests in jeopardy.
With American manufacturing facing increasingly stiff competition from rising rivals, Trump intends to slam the door in the face of all comers to the US market. And when he says ‘America First’, he doesn’t mean ‘America and its allies First’. He means precisely what he says. That means tariffs not only on Chinese goods, but also European goods.
European capitalism is already in an impasse. A tariff war will further add to its woes, not only because it will hamper EU entry into its biggest export market, but because it will force China to look for other markets, including the European market, to dump its own surplus.
But that’s only the beginning of the problem for Europe. Trump’s policy is not simply one of economic protectionism, but of geopolitical retrenchment.
Retrenchment
In the November election campaign, the liberals poured forth about how Trump is ‘mad’. They would have us believe that they, in contrast, are ‘the adults in the room’. The brashness of Trump’s rhetoric, and the apparent outlandishness of his statements about annexing bits of US neighbours and allies, may lend itself to the idea that he is indeed unhinged.
But in many ways, it is the liberals who have lost touch with reality, and Trump whose policy represents the more sober assessment of the hard realities facing US imperialism in the present moment. The liberals’ policy, of ignoring reality and attempting to impose US hegemony everywhere all at once, has led to expensive catastrophe after expensive catastrophe: in Afghanistan, in Syria, in Ukraine. And for what? They have neither halted nor even slowed US decline.
Trump intends to right this imbalance and recognise in deeds that the US, whilst still the world’s preeminent military power, is no longer all-dominant and no longer intends to imagine itself as such. It has to pick its battles. That means strengthening its power in those parts of the globe where it has really vital interests and spheres of influence to defend. But it also means acknowledging that its rivals also have their spheres of influence, which it would be fruitless to contend over.
There is an undeniable logic to this. But this means a number of things. It means US imperialism must abandon the hypocritical pretence of upholding a so-called ‘rules-based order’. No, Trump is clearly and honestly admitting that ‘might is right’ (or, to use his own phrase, “peace through strength”.)
It also means reaffirming US control over its ‘near abroad’: Canada, Mexico, Panama, and of course Greenland. The Danish government was aghast at Trump’s designs on their colonial possession. But given that they have a mere 50 soldiers posted there, there’s little that they can do except protest publicly… and negotiate privately.
What we have here is one NATO member threatening to invade another NATO member. What does it say about the future of this so-called alliance? Trump wishes to strengthen the US presence in areas it regards as of vital strategic and economic importance. Greenland and the Arctic are among them. The Pacific region too is another area of vital geostrategic significance to American capital. But the little backwater of Europe no longer falls under that ambit. The centre of gravity of the world economy long ago shifted from the Atlantic to the Pacific region.
The primary military function of NATO, however, has always been precisely in Europe, with a focus on Russia (previously the Soviet Union and the Warsaw Pact) and on securing western domination in Europe. Trump has, again, been quite candid that the Ukraine war was provoked by the West by the eastward expansion of NATO. He has also been clear that, from a US point of view, this war is an expensive distraction far from the centre of US interests. In both assessments, he’s correct, and he has vowed to negotiate the end of the war the moment he enters the Oval Office.
This has really put the cat among the pigeons in European capitals. The Europeans were dragged into this war by the Biden Administration. The failure of the war and its accompanying sanctions have resulted in a blow to the economies and the prestige of the Europeans without recent precedent. Now they are being told that if the war is to continue, the Europeans can do so on their own terms and at their own expense, without US assistance. This is a NATO war, and yet going forward the main military contributor to NATO has declared that they’re out.
All this poses a question over the future existence of NATO. And Trump has made quite clear that he won’t be losing sleep over that. Given that the US provides 65 percent of the military clout to an alliance focussed far from its real centre of interests, it appears to him, not unreasonably, as an unnecessary subsidy to European defence spending. He has made clear, the Europeans are freeloaders, and unless the continent’s NATO members ramp up military spending to 5 percent of GDP, he is willing to walk out of the alliance altogether.
His courtship of so-called ‘far right’ nationalist outfits in Europe, not to mention Elon Musk’s railing against the “undemocratic” nature of the European parliament, would suggest that not only NATO but the EU itself could go to the wall for all Trump cares. This would align with his ‘America First’ strategy of not just boosting American industry, but of weakening industrial competitors, including Europe.
As transatlantic trade and defence relations fray, both NATO and the EU are in very real danger of completely unwinding in the period to come. Such a splintering of the continent would represent a catastrophe for the ruling classes of Europe.
Clinging to US coattails
European capitalism has clung to the coattails of US imperialism since the end of the Second World War.
In NATO, US imperialism provided the military umbrella for the small imperialist nations of Europe to gather under. In what became the EU, it forced them, often against their own petty national interests, to integrate as a bloc. And it gave the economic stimulus for the revival of European and particularly German capitalism after the continent had fought itself to exhaustion during the Second World War.
When Berlin fell to the Allies in 1945, the first instinct of the British and French were those of petty, ruined victor nations. They began robbing and plundering Germany, hoping to permanently lay German imperialism low, putting an end once and for all to Germany even as an industrial nation.
Factories were disassembled and packed off for reassembly in Britain and France. Tonnes of raw material were extracted in reparation, and tens of thousands of German prisoners of war were turned into forced labourers to help British and French reconstruction.
Had it been left to Britain and France, a ‘Super Versailles’ would have been imposed on Germany. But the US stepped in to put an end to their shenanigans, which reflected the dwarfish ambitions of now second-rate powers.
The US needed to reconstruct a powerful, industrialised West Germany as a counterweight to the Soviet Union on the European continent. It needed to rebuild Europe to forestall revolution and to halt the advance of communism. It thus funded a policy of rebuilding European capitalism, and forcing these little states together under its own domination.
Thus, by the early 1950s, US policy towards Europe had become one of pouring in huge amounts of Marshall Aid to assist reconstruction. Cheap loans were granted and old debts wiped clean. It was US pressure that forced the continental European powers to come together into the European Coal and Steel Community, the predecessor to the EU.
Much to the annoyance of the US, the British insisted on remaining aloof, holding onto their silly notion that they were a first order power with a ‘special relationship’ with the US, with whom they deluded themselves that they could deal on equal terms.
The Americans would have preferred to unite Europe around Britain as a surer vector of their own interests. Instead they based themselves on the French who enthusiastically went along with the US plan, falsely imagining that they, and not the Germans, were the ones destined to come to dominate a new integrated Europe. But it was the Americans calling the shots and driving the process of European integration at the outset.
This plan, to bring an industrially reconstructed Europe together as a counterweight to the Soviet Union was underpinned by the military alliance, NATO, formed in 1949, and the presence of nearly half a million US troops, not to mention nuclear capabilities, on the continent. Again, the US had to contend with the jostling of the once great powers of Europe to try and maintain their old status. The French ruling class, for instance, insisted on having their own independent nuclear arsenal, separate from that of NATO. They liked to imagine that this elevated them to the level of equals with the great superpowers, which it clearly did not.
Of course, the EU and its predecessor organisations were not merely vehicles for US interests. The European capitalist classes always had their own distinct interests and competed with American capitalism. US imperialism was keen not to allow European imperialism to emerge as a powerful military competitor, and there were always limits to its support for European integration.
NATO went hand-in-hand with limits on German rearmament, and throughout the postwar period, the US was always wary of a common European defence policy independent of NATO. Indeed, once the British, loyal lapdogs of US imperialism that they were, had joined the EEC and then the EU, they could always be depended upon to block repeated initiatives to form anything like a European army.
Yet, for a whole period, Europe actually profited from this arrangement whereby any military ambitions it had were throttled by the US. With NATO assistance, military spending could remain relatively low and the cash thus saved could be ploughed back into investment.
US economic might was the basis upon which America was able to economically and militarily underwrite and dominate Europe. But all of the factors that incentivised and allowed US imperialism to prop up and bind together European capitalism have turned into their opposites in recent decades.
Since the 1990s, there has ceased to be any need to ‘contain’ the Soviet Union. NATO remained a useful umbrella for pushing western (that is US) influence into the former Soviet sphere of influence. But the impetus to form the EU in 1993 thus came from the Europeans themselves.
To compete effectively on the world market, they had to huddle together. In a period of trade liberalisation and globalisation, the formation of the common market didn’t meet with any US objections, and the eastward expansion of the EU acted as another transmission belt for US influence in the direction of Russia.
Militarily, the winding down of the US military presence in Europe after the Cold War also sent a clear message to European capitalism. They could not rest indefinitely on US military might. They made various attempts to unite militarily on their own initiative… and every time fell short of what they aimed for because of the irreconcilable patchwork of national interests that comprise the EU.
It is enough to ask the question “what would be the focus of an EU military?” to see what a bind a common defence policy places the EU in. The French have imperialist interests in West Africa to defend. The Baltic and Nordic countries would focus on the Russian threat. For the Irish, there is the question of undersea transatlantic cables, etc., etc.
The diminutive scale of European industry also posed economic barriers to what it can accomplish militarily. The project to develop the Eurofighter, for instance, led to spiralling costs and delay after delay due to the complicated transnational mish-mash of a consortium involved in its development. Composed of various European aerospace companies, each operated a bit of the supply chain, and the whole process was beset by chaos.
But for all these stumbling efforts to stand on its own two feet, Europe has continued to hold together. That owes no small part to the fact that the US ruling class has held fast to the idea that it can and will hold the whole world under the aegis of its own singular domination indefinitely. With the Soviet Union no longer blocking its path, the US appeared to be an imperialist force of apparently unlimited global reach. This was supposed to be the New American Century.
But that goal soon faltered. US imperialism became overstretched. Meanwhile, the growth of capitalism in East Asia has shifted the centre of US interests from the Atlantic to the Pacific region. Europe is of little importance to US capitalism today. And even if it desired to maintain the grip it once had everywhere, US imperialism is in relative decline. It no longer possesses the resources it once had to underwrite the expenses that its economic and military alliance with Europe entails
The sea change was clear even under Biden. Tariffs and subsidies that have been applied under his administration through the Inflation Reduction Act (IRA), the CHIPS Act and other acts have precisely targeted European manufacturing. Trump merely gives a sharper reflection of these facts in his policies.
A dark road ahead
What does all this now mean for Europe? It means it is looking to a future where it will sink or swim based on its own efforts, and the prospects are not good.
The formation of the European Union reflected the need of small, declining powers to huddle together to survive. But it was not forged as a political entity through a revolution that cleared the decks of national antagonisms. European integration has been held together with the support of US imperialism, and with the good fortune of a protracted economic boom that endured throughout the postwar period and temporarily masked the diverging national interests of a patchwork of petty nation states.
This is at the root of the long-term decline of European capitalism. These small nation states do not have the means to produce monopolies of the size and productivity necessary to compete with US and Chinese behemoths. By cutting off Russian gas from the European market with the onset of the Ukraine war, they added to their own woes, and a renewed trade war will add to them further.
Economic deterioration has the potential to cause the re-emergence of a renewed sovereign debt crisis, only this time it will not just be the smaller, ‘peripheral’ European nations that are acutely affected. Rather, core member states including France and Italy, with their ballooning deficits and above all debts, are likely to be in the eye of the storm.
With the US no longer the singular gravitational pole tugging at the continent, the European nations are going to be pulled in all sorts of diverging directions.
With an end to the Ukraine war looming, there will be some national capitalist classes with an interest in restoring oil and gas flows from Russia, such as Austria and Germany, and others that are very hostile, such as Poland, the Baltics and the Scandinavians.
Without the US holding the marching baton, tensions are likely to erupt ever more openly. And Trump has made clear that, while he has no interest in continuing the Ukraine war, if Europe doesn’t want to face the economic wrath of the US, it had better start buying more American oil and gas quickly.
With walls going up around the US market, the different European nations are also going to be pulled in different directions in order to find new markets. Some will prefer complete capitulation to any and all US demands. For others, Russia is waiting, and so too is China.
Already last year, differences erupted into the open among member states over whether to place tariffs on Chinese electric vehicles. France, Poland and European Commission president Ursula von der Leyen led the charge. But Germany, Hungary, Spain and Slovakia all publicly expressed their displeasure with the plans – Germany out of fear of Chinese retaliation, the others because they are courting Chinese investment.
This is all before we consider the political implications of rising discontent in Europe, which threatens to bring to power a slew of right-wing parties from outside the traditional establishment: Le Pen in France, AfD in Germany, FPÖ in Austria, even Farage in Britain. What new variables would such governments represent once they enter the equation?
Is this all inevitable? There are strategists in Europe who, far from simply bemoaning Trump’s disregard for the ‘rules-based order’ and other shibboleths, understand the cold hard facts.
Draghi, as we have commented on elsewhere, has produced a very interesting study which calls for massive, state-led investment on a continent-wide basis. Only in this way, he explained, can the continent produce a class of European champions, massive monopolies, that could compete seriously against their American and Chinese rivals.
There are, however, a few snags. Where would this investment go? Would these be German or French champions? One can safely assume that they will not be Greek or Spanish or Portuguese champions. Such investment poses once more the stubborn problem of the competing national interests of European capitalism. Furthermore, such a massive investment increase would come at a massive cost of an additional 4.5 percent of European GDP according to Draghi’s own figures.
Others too, looking to the Trump era, have issued a warning to Europe. Mark Rutte, secretary general of NATO, has told European members that they must raise military spending to 4 percent of GDP, double the present 2 percent target. If Europe is to stand on its own two feet when it comes to militarily defending its imperialist interests, it has no choice. This still does not address the fact that the EU doesn’t have its own army, and its armies remain integrated under US command through NATO!
But here is the problem with Rutte’s proposal: the European capitalist class has already cut spending to the bone with massive austerity, and yet 10 of the 27 member states are still running deficits in excess of the 3 percent of GDP limit laid out in the Maastricht Treaty. France is running a whopping 6.1 percent deficit.
On top of this, the likes of Draghi and Rutte are telling them they must enormously increase state spending on investment and military spending if European capitalism is to have a future! In order to achieve that, European governments would have to implement austerity measures with a savagery without historic precedent on the continent. Indeed, Rutte explained precisely this in his address in December, “I know spending more on defence means spending less on other priorities,” he told the listening press and politicians. “But it is only a little less.”
Only a little less food, only a little less for the healthcare system, a little less heating for pensioners. A little less, and Europe could produce a world-class military machine that could kill and maim for Europe’s billionaire class.
However, the government of France collapsed after a failed attempt in the autumn to pass an austerity package that
would have seen the deficit slashed merely from 6.1 percent to 5.4 percent of GDP.
Until now, the ruling classes have baulked at carrying out anything even approaching the measures that would be needed to give European capitalism a future in the dog-eat-dog world that is coming. And that’s because they know what it would mean to do so: social unrest, political turmoil, even revolution. Yet they may be forced to carry out such policies in the future, with all the risk that entails. Because the alternative is bleak indeed for European capitalism. It promises to bring an accelerating decline. The end of NATO is wholly possible, and so too is the complete fracturing of the continent and the collapse of the EU.
In the end, the continent will end up in the same place. Events are laying the groundwork for the European revolution.
