**”Surprising Partnership: Trump and Vance Unite Europe”**
Maroš Šefčovič, the Commissioner for Trade and Economic Security, holds a press conference following a Foreign Affairs Council on Trade at the EU Council building in Luxembourg on April 7, 2025. Image Credit: Jean-Christophe Verhaegen—AFP/Getty Images
President Donald Trump and Vice President JD Vance have achieved a groundbreaking feat that no other politician has managed before: they have brought about a unified Europe. Every movement needs a unifying figure, and for the emerging European Awakening, the tariff-supporting Trump and the contemplative Vance embody this role.
Consider Vance’s confrontational speech at the Munich Security Conference, his criticisms of Ukrainian President Volodymyr Zelensky in the Oval Office echoing Russian President Vladimir Putin’s rhetoric, a recent Signal message expressing disdain for bailing out Europe, and his endorsement of tariffs—all of these actions indicate that the Trump Administration views Europe as a rival. Not only have Vance and Trump succeeded in uniting Europeans, but they have also roused Germany, the sleeping giant of the continent. Under Berlin’s leadership, Europe now finds itself engaged in a dual conflict: a trade war with America and a European standoff with Russia in Ukraine. It is often said that Europe is forged in times of crisis, and the current situation is no exception.
This European Awakening did not originate in Brussels but rather in the Oval Office, with the Kremlin playing a pivotal role. If a conflict between America and Europe ensues, it will unfold on three fronts: economic, geopolitical, and financial.
In global trade disputes, size is a crucial factor. Washington seems to have overlooked the fact that, in terms of global trade, the U.S. is a smaller player compared to the EU. The U.S. accounts for around 12.7% of global imports and 9.7% of exports, while Germany, Italy, France, and the Netherlands alone represent 15.8% of imports and 16.4% of exports. Given that 87.3% of imports and 90.3% of exports come from sources other than the U.S., there is ample opportunity for global growth if the U.S. reverts back to protectionist policies akin to those of the 1930s. While some trading hubs like Ireland may struggle without the U.S., continental Europe is less vulnerable—and they are aware of this fact.
Trump and Vance have made a critical error in prioritizing improved relations with the Kremlin at the cost of undermining ties with the EU. The European economy significantly surpasses Russia’s in size. Consequently, the U.S. has triggered a fundamental shift in European defense policy, spending, and procurement. The Euro is gaining strength against the dollar, German long-term interest rates are rising, and European stocks are outperforming U.S. stocks, signaling that the U.S. and Europe are on divergent growth paths. Europe
Shifting focus to armaments, Germany’s prudent financial management has provided it with significant “fiscal space” for borrowing, contrasting with the concerning state of America’s finances due to overspending. The ongoing global trade tensions may also lead to a capital war, prompting countries to repatriate their funds. There is speculation about the U.S. facing challenges if European investors decide to withdraw their investments, given America’s massive debt burden. Despite its economic prowess and technological advancements, the U.S. relies heavily on foreign investments. If European nations, led by Europe, decide to divest from American bonds, it could result in a sharp increase in U.S. domestic interest rates, impacting the country’s financial stability. The U.S. is currently grappling with a substantial budget deficit and a soaring national debt, raising concerns about its long-term financial sustainability. The historical example of Britain’s decline from a global creditor to a debtor during World War I serves as a cautionary tale, highlighting the potential consequences of unsustainable debt levels. The financial landscape post-World War I saw significant shifts in global economic power, emphasizing the importance of prudent financial management in navigating uncertain times.
As the world’s dominant creditor, the United States was owed billions during and after World War II, leading to Americans acquiring European assets at discounted prices. This shift of financial power from London to New York and from Europe to America shaped global monetary relations for the following century. The Americans were determined not to miss out on this opportunity, which ultimately led to the rise of the dollar as a prominent currency.
While a scenario where Europe and the world demand repayment of U.S. debts is possible, it is not a likely outcome based on rational projections of the future. The stability of the world plays a crucial role in minimizing the risk of extreme events. However, with the unpredictability of a Trump presidency, the range of potential outcomes widens, increasing the possibility of negative consequences due to the interconnected nature of the global economy.
Since 1945, Europe and America have maintained a strong partnership founded on shared democratic values, mutual prosperity, and military cooperation against common adversaries. This alliance has endured various challenges, including periods of tension. If this relationship were to deteriorate, it is unlikely to end amicably.
David McWilliams, an economist, author, podcaster, journalist, and adjunct professor at Trinity College Dublin, will release his acclaimed book “The History of Money: A Story of Humanity” in the U.S. market on Nov. 11, 2025. For inquiries, please contact us at letters@time.com.
