Geoeconomic Turn in the US-EU Relationship

Key points

• Donald Trump’s second term as US president has transformed transatlantic economic relations from a 75-year partnership framework into a transactional system where the United States is weaponising market access to compel European concessions. The Turnberry framework agreement should be understood not as a resolution of current US-EU tensions, but as a template for ongoing geoeconomic coercion.
• The Trump administration is employing a coherent strategy combining calibrated escalation, manufactured uncertainty and explicit trade-security linkages. Rather than policy chaos, these represent deliberate tools that exploit Europe’s structural vulnerabilities while maintaining domestic US political sustainability.
• Unlike Trump’s first term, economic and security policy are now explicitly fused (forming a trade-security nexus), creating a “double jeopardy” problem for European governments, which must simultaneously absorb tariff-induced GDP losses while increasing defence spending, making European strategic autonomy fiscally impossible in the near term.
• European strategy must start by acknowledging that the United States will maintain leverage superiority in the US-EU relationship for the foreseeable future. This means that Europe must optimise its position within constraints rather than seeking parity with the United States, and accept elevated baseline friction as normal rather than aberrant.