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Starting in January of 2025, Trump will be prepared to launch a trade war with half the world. His campaign slogan, »America First,« is simultaneously the core of his program for governing. More than anything else, Trump wants to protect the American economy and American jobs. However, that strategy can work only if foreign competitors are handicapped in U.S. markets.
Starting in January of 2025, Trump will be prepared to launch a trade war with half the world. His campaign slogan, »America First,« is simultaneously the core of his program for governing. More than anything else, Trump wants to protect the American economy and American jobs. However, that strategy can work only if foreign competitors are handicapped in U.S. markets. Toward that end, Trump announced during his electoral campaign that, among other measures, he would impose high import duties. Germany, Europe’s leading exporter, would likely be the hardest hit by such a protectionist policy. Outside of the EU, the United States is Germany’s most important trading partner. For example, in 2023 the Federal Republic exported goods valued at about 158 billion euros to the USA.
It would be no exaggeration to forecast that, with Trump once ensconced in the White House, previously free trade – the very economic globalization once championed by the United States itself – might come to an end or undergo a drastic slowdown. During his first term (January, 2017 to January, 2021) Trump imposed punitive tariffs on Chinese products, which were actually increased by the Joe Biden administration that succeeded him. The United States slapped import duties of 100% on electric vehicles from China. To safeguard domestic jobs still more fully, Trump now wants to take on the German automobile industry as well.
»Trump’s political thought, shaped by economic interests, is simple but effective.«
According to both Der Spiegel and Deutsche Welle he is supposed to have said, as early as 2017: »The Germans are bad, very bad.« In a tone of annoyance mixed with envy he added: »Look at the millions of cars they sell in the USA. Terrible. We’re going to put a stop to that.« At that time, he was referring only to German trade surpluses. Now he also might unleash a trade war with Germany by levying duties on imported German cars as high as those faced by the country’s Chinese competitors. Alternatively, the German auto industry might shift production to the United States. There have been factories there for decades, including a BMW plant in South Carolina, one for Daimler Benz in Alabama, and a VW factory in Tennessee. If the German firms don’t knuckle under, they may be punished by the imposition of import duties. Trump’s political thought, shaped by economic interests, is simple but effective.
New opportunities for German carmakers
German vehicle manufacturers would enjoy one advantage over their Chinese counterparts: Because German companies so far have tended to specialize in fossil fuel-powered cars – a disadvantage on the world market – their focus on such vehicles may turn out to be an advantage for sales in the USA, since Trump praises American oil and gas and wants to produce more of both by fracking. Fracking is extremely harmful to the environment. It is a recovery method that relies on a mixture of water, sand, and chemicals to break up subterranean rock, thus releasing otherwise-inaccessible deposits of gas and oil trapped within. Because the Republican Trump won a lot of votes by emphasizing precisely such projects, he will feel emboldened to keep going in that direction.
Yet some observers of the American electric vehicle market believe that Trump might do an about-face at some point in his four-year term and end up favoring transportation by E-vehicles. Because Elon Musk is acting more and more like one of the President-elect’s closest and most influential supporters, it would not be far-fetched to expect that Musk, who founded the American electric vehicle manufacturer Tesla, might be able to influence Trump to move in a more pro-EV direction. It is significant that the stock price of Tesla rose by 15% right after Trump’s electoral victory was announced, whereas share values of the German automakers fell precipitously.
Whether even the battery component-producing Tesla factory in Grünheide, a city in Brandenburg, can be saved remains an open question, since American import duties would jeopardize that facility too, even though it is owned by Tesla and thus by Musk.
But above all, the second Trump term may sound the death knell for already-weakened Volkswagen’s Mexican plants. Even well before the election, on September 18 of this year, he noted during a conservative Fox News broadcast that he would impose tariffs of 200% – or maybe even 500%- – on automobiles made in Mexico, »so high and for so long that they won’t be able to sell a single car anymore.« By »they« he meant Volkswagen and Chinese automakers producing cars in Mexico
The goal is to divide the EU
Generally speaking, Trump does not get along well with Germany. He knows that our media and political elites are not well disposed toward him. Even though as a businessman he should be able to ignore the influence of public sentiment in making decisions about objective issues, Trump has proved in the past that his self-esteem is deeply affected by personal likes and dislikes. Since he has been painted as a bogeyman in German public perceptions, he naturally gravitates toward countries and political leaders who welcome his electoral win. In Europe that means especially Viktor Orbán, the prime minister of Hungary.
Orbán, the only European head of state who is friendly with Trump, also maintains an open diplomatic channel to Vladimir Putin. In July, 2024, he paid a visit to Moscow – severely criticized by most political leaders in the EU – in which he lobbied for peace in Ukraine. Afterwards, he met with Trump in Florida. Orbán, praised by Trump more than once as an »outstanding political leader,« long has advocated a reappraisal of relations with Ukraine. For instance, according to Reuters, he renewed his opposition to military aid for Ukraine on November 3, 2024. In a press conference, Orbán indicated that he assumed Trump would suspend military aid to Ukraine and set a new course toward a peace agreement between that country and Russia. In that case, Orbán continued, Europe would not be able to bear the burden of the war all alone and would have to accommodate itself to Trump’s new course.
It seems safe to assume that most EU member-countries would disagree with Orbán’s analysis, since the Hungarian leader seems to be behaving as Trump’s avatar in Europe. Yet in the end this will mean that those European countries less enthusiastic about paying for the war will fob off the main burden onto Germany. In that sense we should wish that the »24-hour solution« to the Ukraine War proclaimed by Trump, however unrealistic it might seem, actually succeeds, provided that it really would entail a just peace for Ukraine.
»Nothing but bad news for Europe«
Apart from the feasibility of his putative solution to the war, we may conclude more generally that Trump has no interest in European unity. The British daily The Guardian took up this very issue shortly after the election, painting a gloomy picture of what was to come: »The election will bring nothing but bad news for Europe. The only question is: how bad will it get?«
Not only will Trump encourage national populist leaders like Viktor Orbán of Hungary, Robert Fico of Slovakia, and Alexandar Vučić of Serbia to form a group of their own with no loyalty toward the EU and its values. But in addition, European conservatives will feel emboldened by Trump’s victory to persist in questioning Europe’s liberal values, especially on migration and gender issues. That assumption can be verified by reference to numerous social media posts. Ultraconservative outpourings of joy over Trump’s victory literally overwhelmed the usual platforms.
The battle of the billionaires
What else can we expect from Trump’s four years in office? His billionaire supporters include not only Elon Musk, but also the founder of Paypal, Peter Thiel, whom the Austrian daily Der Standard dubbed the »shadow president of the USA and an enemy of democracy.« On numerous occasions Thiel has expressed the view that democracy is incompatible with freedom. Instead, a group of entrepreneurs should seize the reins of government to ensure the well-being of the masses.
At this point one can only speculate about how large such a group of like-minded entrepreneurs might be. Yet it is striking that even the founder of Amazon, Jeff Bezos, has joined them. Bezos has owned the principal daily newspaper of the nation’s capital, the Washington Post, for several years. As the paper’s owner, he prevented the Post from offering readers its traditional endorsement of a presidential candidate prior to the 2024 election. The Post’s clear choice would have been Kamala Harris, the Democratic candidate. What this ominous group of entrepreneurs wants to accomplish in Europe is to maintain absolutely unimpeded access to all social media. Thus, for example, Musk recently reacted with outrage and hostility to efforts by the EU and Great Britain to regulate hate speech and misinformation on his social media platform, X.
On September 17 a British newspaper, The Independent, included a report that the public barely noticed, according to which the Vice-President elect, J.D. Vance, threatened that the Trump Administration might withhold American support from European NATO members involved in serious conflicts, »if the EU continues to move against Elon Musk’s portal, X.« Rarely have an American President and his Vice President sided so openly with the interests of big capital.