Europe's Imperative to Counter Trump's Economic Bullying
In February of last year, Donald Trump convened the first full cabinet meeting of his second term in the White House, where he proudly announced sweeping tariffs on the United States' closest allies in Europe. When questioned by a reporter about potential European retaliation, Trump responded with unwavering confidence. "They can't," he asserted, adding, "We are the pot of gold. We're the one that everybody wants. And they can retaliate, but it cannot be a successful retaliation." From Trump's perspective, Europe appeared weak and feckless—a minnow compared to the colossal American economic juggernaut. He believed that when confronted with a US president willing to leverage his country's immense weight, Europe would inevitably capitulate.
A Year of Economic Coercion and European Acquiescence
Over the subsequent year, Trump has repeatedly wielded America's economic might against European nations, from coercing the European Union and the United Kingdom into accepting lopsided trade deals to pressuring Denmark into selling Greenland. Time and again, his assessment has proven accurate: European countries have often scurried to him, hat in hand, eager to negotiate deals on his terms. To endure another three years of a Trump presidency, European leaders must urgently adopt a fundamentally different approach. Drawing from years of experience as a state department official designing and negotiating sanctions, I have witnessed firsthand how economic pressure operates in practice—and how it can falter when the target demonstrates preparedness to absorb pain and push back effectively.
Lessons from Global Powers: India, Brazil, and China
Countries such as India, Brazil, and China have faced similar Trumpian economic coercion and managed not only to survive but to preserve their core national interests. In doing so, they have established themselves as serious geoeconomic players who cannot be easily bullied. Although their strategies varied, each nation successfully combined three critical elements: resolve, resilience, and retaliation. Europe will need to master all three to withstand Trump's pressures while maintaining its dignity and autonomy on the global stage.
Step One: Cultivating Resolve Like India
The initial step involves rallying robust public support for defiance. While losing access to the US market is undoubtedly painful—given that the US remains the world's largest importer—for most nations, it is survivable. India serves as a compelling case study. Last summer, irritated by Prime Minister Narendra Modi's refusal to nominate him for the Nobel Peace Prize, Trump imposed a 50% levy on India, rendering it one of the most heavily tariffed countries globally. Rather than hastily drafting a Nobel nomination, Modi stood firm. "India will never compromise on the interests of its farmers, livestock rearers, and fisherfolk," he declared resolutely.
Modi's unwavering resolve galvanised the Indian populace. Lawmakers coordinated boycotts of American products, and businesses refused to slash prices to continue selling into the US market. Eventually, Trump grew frustrated and shifted his attention elsewhere. By rejecting appeasement and demonstrating readiness to endure short-term economic pain, India not only survived Trump's onslaught but also earned grudging respect within the White House.
Step Two: Building Resilience Like Brazil
The second step focuses on redirecting trade flows to enhance economic resilience. Around the same period his relationship with Modi deteriorated, Trump initiated a conflict with Brazil's President Luiz Inácio Lula da Silva. Lula had committed the perceived sin of allowing his government to prosecute his predecessor, rightwing populist Jair Bolsonaro, for allegedly plotting a coup following his 2022 electoral defeat. In an attempt to force Lula to drop the charges, Trump imposed steep tariffs on Brazilian goods and sanctioned the supreme court judge overseeing Bolsonaro's case.
Brazil's response centred on strategic adaptation. Instead of scrambling to regain access to the US market, Lula's government acted swiftly to reorient trade towards alternative markets. Shipments of beef and coffee originally destined for America were rerouted to China, the Gulf states, and Southeast Asia, facilitated by state-backed finance and discreet coordination with buyers. By year's end, Brazilian exports had reached record highs, while US consumers complained about rising coffee prices. Having failed to coerce Lula, Trump ultimately removed the tariffs and lifted sanctions on the Brazilian judge. By showcasing Brazil's resilience to US pressure, Lula effectively stripped Trump of his leverage.
Step Three: Mastering Retaliation Like China
The third and final step involves the strategic use of retaliation. During Trump's first term, Chinese President Xi Jinping met with a group of CEOs before the initial round of US tariffs took effect. "In the west, you have the notion that if somebody hits you on the left cheek, you turn the other cheek," Xi remarked. "In our culture, we punch back." At that time, Beijing was unprepared for a full-scale economic war. However, it began meticulously mapping choke points that could eventually be weaponised against the US.
When Trump returned to the White House and promptly unleashed a new wave of tariffs and technology restrictions on China, Beijing unveiled its carefully crafted plan. In addition to reciprocating Trump's sky-high duties, China cut off America's access to rare-earth minerals essential for manufacturing everything from automobiles to fighter jets. Given that China refines 90% of the global supply of these critical minerals, the impact was immediate and severe, forcing companies like Ford and Suzuki to close factories. The combined blow of tariffs and rare-earth restrictions erased trillions from the US stock market and sparked fears of a recession. Trump hastily agreed to a truce, and within months, he was permitting Chinese firms to purchase powerful Nvidia AI chips while referring to the US and China as the "G2."
Europe's Path Forward: A Cohesive Strategy
The Greenland crisis was neither the first nor the last time Trump has threatened economic war against Europe. Europe urgently requires a coherent and robust strategy. Like Modi, European leaders must demonstrate resolve by rallying their publics to accept some economic pain in defence of their autonomy and sovereignty. Several leaders have begun moving in this direction, but efforts remain uneven, and Trump will inevitably interpret division as weakness.
Like Lula, Europe must also enhance its economic resilience. This is an area where significant progress has been made, with the European Union concluding new trade agreements with South American nations and India. However, any European strategy will ultimately fail unless it also learns from Xi's approach. Retaliation makes many in Europe understandably uncomfortable, yet the transatlantic relationship is not one of unilateral dependence; it is fundamentally interdependent.
Silicon Valley derives a substantial share of its profits from the European market. American ambitions to domestically manufacture advanced semiconductors would collapse without Dutch chipmaking equipment. European investors hold a staggering $8 trillion in US stocks and bonds. Europe's objective should not be to play all these cards simultaneously, as that would precipitate economic calamity for both sides. Instead, Europe needs something simpler and more credible: a clear plan to deploy some of these leverage points when the next crisis inevitably arrives.
Over the past year, Europe has learned a harsh lesson: Trump's economic threats will not simply dissipate on their own. They cease only when they become prohibitively expensive for the United States. By embracing a triad of resolve, resilience, and retaliation, Europe can transform from a perceived minnow into a formidable geoeconomic power capable of standing up to bullying and safeguarding its interests in an increasingly volatile world.
