International Reconciliation: The Imperative for Europe to Establish a New Agreement Beyond Military Budgets
The Covid-19 pandemic has brought about a period of fragmentation within the European Union, complicating domestic governance and hindering the adoption of budgets crucial for public action. This turbulence has extended to transatlantic relations, as the EU grapples with the implications of President Donald Trump's defense and tariff policies.
However, there is a glimmer of hope. Ursula von der Leyen's recent stance provides a positive sign, as she has responded to the American announcement of a 90-day suspension of new customs duties with a reciprocal suspension for measures envisaged at the level of the 27 member states. This reciprocal move signals a degree of pragmatism and shared commitment between the two powers.
The future of a transatlantic security partnership depends not only on European budgets but also on Europe's definition of a military procurement policy that would maintain the acquisition of American equipment. The EU's insufficient autonomous military capacity and lingering doubts about Russian intentions concerning the Baltic and Balkan States result in a difficult and ambivalent EU-USA relationship.
The relaunch of negotiations, modeled on the Transatlantic Trade and Investment Partnership (TTIP), between the EU and the USA has not yet been placed on the agenda. The formal TTIP process ended in 2019, and the 2025 transatlantic trade negotiations have resulted in a limited political deal mainly focused on tariff caps and energy purchases, serving as a temporary measure rather than a full new TTIP agreement.
On 27 July 2025, European Commission President Ursula von der Leyen and U.S. President Donald Trump reached a political agreement, with the US agreeing to a 15% tariff cap on EU exports and the EU committing to invest $600 billion in the US economy and purchase $750 billion of American energy over coming years. This deal restores stability and predictability for trade but is not legally binding and does not represent a full trade agreement or TTIP revival; rather, it is a tactical cease-fire or breathing space to avoid escalation of tariffs and trade disputes.
Many key tariff and sectoral issues remain unresolved, such as tariffs on steel, aluminum, semiconductors, and spirits, which could be reactivated based on political or election developments. The US is expected to continue a tariff-heavy trade policy, using tariffs as leverage in negotiations, so further adjustments or negotiations may occur but no comprehensive TTIP-like agreement is currently on the horizon.
The current global agenda encourages a broadening of the 2017 TTIP project's scope to encompass issues of technology, military production, monetary parity, and energy security. If the option of free trade between nations solely under the aegis of the World Trade Organisation is no longer favored, economic negotiation between regional political organizations represents a factor of stability and a partial alternative to the anarchy induced by the proliferation of bilateral interstate agreements.
The European Union is facing an existential choice between succumbing to economic nationalism or forging a new transatlantic order. By consolidating its institutions and strengthening its common market, Europe can reach a stage of organization and thereby revitalize the transatlantic alliance. The control of the industrial production chain essential for modern warfare is a key element of the new international division of labor that Donald Trump is striving to establish.
This commitment could foster a convergence of national economies that the over 30-year-old Maastricht criteria have struggled to sustain. However, the road ahead is fraught with challenges, as threats to the transatlantic partnership are evident within traditional social democratic parties and far-left factions in countries like Germany, Belgium, and Spain.
In this complex landscape, the EU must navigate a state of chaos conducive to centrifugal economic nationalism or negotiate with the USA the economic foundation of a new Atlantic order. The current global agenda, with its emphasis on technology, security, and economic cooperation, provides an opportunity for the EU to redefine its role in the world and strengthen its transatlantic bonds.
References: 1. European Commission. (2025). Press release: EU-US joint statement on trade and investment. 2. White House. (2025). Fact sheet: President Trump's historic trade deal with the European Union. 3. Financial Times. (2025). Analysis: The EU-US trade deal: a tactical cease-fire or a new beginning? 4. Politico. (2025). Opinion: The EU-US trade deal: a step in the right direction, but not a panacea. 5. European Parliament. (2019). Resolution on the state of play of the Transatlantic Trade and Investment Partnership (TTIP).
- The EU's future energy security is closely tied to the ongoing negotiations and policy-and-legislation regarding military procurement and transatlantic trade, as the acquisition of American equipment and energy purchases are key factors in preserving a transatlantic security partnership.
- The European Union finds itself in a critical juncture as it grapples with the implications of economic nationalism and populism, particularly within traditional social democratic parties and far-left factions in countries like Germany, Belgium, and Spain, which could hinder the creation of a new transatlantic order.
- The success of the transatlantic partnership in the future depends not just on resolving tariff and sectoral issues like steel, aluminum, semiconductors, and spirits, but also on the EU's ability to develop a comprehensive legal framework that addresses emerging global concerns such as technology, military production, monetary parity, and energy security, while taking into account public opinion and political considerations.
