The US’ Transatlantic Challenge

The U.S.’ Transatlantic Challenge

Published on January 28, 2021 / Leer en español

Director, Madrid Policy Bureau

President Biden’s ambitious domestic agenda – in which Puerto Rico aspires to introduce itself – will compete in attention and resources with the administration’s need to repair the fractures inherited from the Trump administration on the international front. There is relief in Europe – the European Parliament has said that Biden’s election represents “a new dawn for transatlantic ties” – but the return of the U.S. to the international community will face a myriad of challenges, even with its traditional allies, the Europeans.

As German Chancellor Angela Merkel – a formidable figure – recently said in Berlin: “don’t think that from tomorrow there will only be harmony between us. There will also be arguments about how best to do things for our two countries”.  Words of caution, considering that the U.S. and the European Union (EU) have the largest bilateral economic relationship in the world. According to the Congressional Research Service, Europe is the U.S.’ most important trading partner, with an exchange of products and services valued at $1.3 trillion each year.

The U.S.’ image has been tarnished in Europe. The prestigious Council on Foreign Relations (ECFR), a strategic studies European think tank, published in January 2021 the results of a survey it conducted in 11 countries of the EU. Although most of those surveyed expressed joy at Biden’s election, many expressed mistrust towards “America” and its future: one out of every three respondents (32%) think that voters in the U.S. could again elect to the Presidency someone like Trump; and more than half (51%) think that the U.S.’ electoral system “is broken” and does not work well. This makes the U.S. a potentially unstable partner. The International Monetary Fund recently developed an index to measure global uncertainty and found that in the past decades the U.S. – its international interventions, its monetary policies, and its electoral events – has been one of the global economy’s main sources of uncertainty.

Trump’s Presidency strengthened Europe’s inclination to pursue an agenda of “strategic autonomy”.  This means that the transatlantic relationship – founded on the U.S.’ leadership during the Second World War, Europe’s reconstruction under the Marshall Plan, and NATO’s transatlantic military alliance – will cease to be solely dominated by the U.S. and will become more of a relationship among peers.  The European Union has started to strengthen the Euro as an international currency (vis a vis the Dollar) and has forged a commercial agreement with China. The Real Instituto Elcano – one of the main Spanish think tanks – considers the agreement a positive one because it best defends “European interests and values”; the Biden administration for its part has expressed its disappointment with the autonomy displayed by its once totally loyal partners. ECFR’s survey found that, even though the U.S. economy is still the world’s largest, six out of ten Europeans think that China will be the world’s dominant power within the next decade. Since it opened its economy in 1978, the Chinese economy has grown at a spectacular annual rate of 10%.

China will not be the only thorn in transatlantic relationships. The EU is convinced of the need to regulate the U.S.’ technological giants – Google, Amazon, Facebook – the so-called “gatekeepers” of the digital world. These corporations dominate digital services, determine who has access or not to the digital space, and dominate the marketing and sale of the data they gather from users. And the prickly issue of the tariff war unleashed by the Trump administration – which imposed import duties on a wide array of European products, from aircrafts to olives – will be one of the first topics that will need to be addressed by the U.S. and the EU early in 2021.  Complicated topics, no doubt, but impossible to ignore as they will serve as the international context for Biden’s ambitious domestic agenda.