Donald Trump's return to the presidency has reignited a bruising trade clash with Europe, renewing pressure on NATO allies and raising the spectre of troop withdrawals while forcing the EU to confront a new era where economics and security are inseparable [3][4]. The competition between the US and China is now simultaneously an economic and security competition, threatening the multilateral system the EU has relied on for nearly seven decades [4].
Brussels is scrambling to redefine its concept of "economic sovereignty," developing new instruments to defend and promote its interests against a world where neither Washington nor Beijing separates trade from geopolitics [4]. The High Representative and the future Commission are tasked with navigating this shift, as the traditional separation of external economic relationships from geopolitical strategy has collapsed [4].
In response to the US-China duopoly, a "coalition of the willing" led by China, Brazil, and Mexico is emerging to uphold a rules-based trade system that could unexpectedly benefit the EU [3]. This group, including China and other nations committed to the World Trade Organisation, may serve as an unexpected ally for Europe in a fragmented global order [3].
The European Investment Bank remains the "quiet enabler" of this strategic pivot, providing the financial backbone for Europe's push toward greater autonomy in a low-growth, high-threat environment [3]. With fiscal pressure mounting and trade wars looming, the EU's economic sovereignty is now the central pillar of its foreign policy.
