As Donald Trump prepares to take office, the future of U.S.-EU relations looks uncertain. His campaign hinted at imposing 20 percent tariffs on imports, stirring worries in Europe, especially after the 2018 trade tension over steel and aluminum. While EU leaders express a desire to collaborate, they have also prepared possible retaliatory measures. Concerns about Trump’s stance on Ukraine and Russia also linger, given his claim that he could resolve the conflict in “twenty-four hours.”
Despite these tensions, the U.S. and EU are more connected than ever, especially in technology. Their collaboration is crucial for achieving their geopolitical goals. This mutual understanding led the Biden administration to establish the Trade and Technology Council (TTC), a platform for discussing tech-related issues between U.S. and EU leaders.
Regardless of what Trump decides to do with the TTC, maintaining cooperation is key. The U.S. and EU face stiff competition from nonmarket economies and struggle in three vital areas: telecommunications, semiconductor production, and sourcing critical minerals. These sectors are vital for infrastructure, medical devices, and military needs, making leadership here essential for future geopolitical success.
In telecommunications, both U.S. parties recognize the need to shield the global internet from Chinese surveillance. After the U.S. imposed bans on Huawei and ZTE, the alternatives largely came from Europe. This need for collaboration led to the initiative known as the Clean Network, which relies on European partners.
When it comes to semiconductors, neither the U.S. nor the EU can match Taiwan’s production, which currently dominates the market with over 60 percent of the world’s semiconductors. Both regions are investing heavily in local chip manufacturing to cut foreign dependencies and reduce market distortions, highlighting the need to work together to ensure sustainable development without undermining each other.
Both the U.S. and EU also rely heavily on China for critical minerals, with estimates showing 98 percent of the EU’s critical minerals come from China and nearly 60 percent for the U.S. Recently, both regions have pivoted towards Africa to diversify sources. They reached a 2023 agreement for building the Lobito Corridor, aimed at improving local infrastructure while securing vital resources.
In the upcoming months, the U.S. and EU must align on enhancing tech cooperation to effectively compete with nonmarket economies. However, the EU must also allow space for the Trump administration to set its priorities while acknowledging differences in views about sustainability and green tech. A cooperative approach and skilled negotiations could help prevent U.S. tariffs against the EU, benefitting both sides as they focus on more pressing challenges.
Trevor Rudolph is the vice president for global digital policy and regulation at Schneider Electric, overseeing the company’s technology policy strategies in North America, Europe, and Asia. His views are his own and may not reflect his employer’s positions.
Further reading
Image: U.S. and European Union flags are shown during a visit of Vice President Mike Pence to the European Commission in Brussels, Belgium, February 20, 2017. REUTERS/Francois Lenoir.
