Europe’s economy could see big changes, depending on whether Trump or Biden is elected, analysts say.
Even before the pandemic, the Trump administration has had a turbulent effect on international business. Many see Biden as more ‘Europe-friendly,’ but there are issues about Biden views that could cause challenges to the relationship between the EU and the US.
What effect would a Biden win have on European business?
“Biden is an internationalist who is likely to repair ties with Europe and international trade institutions. However, he has a protectionist agenda, supporting ‘Buy American’ campaigns, so he will not be entirely as supportive as Obama was,” comments Niclas Frederic Poitiers, an analyst with the Bruegel organisation in Brussels, in an interview with the Cyprus Mail.
For countries like Cyprus, this could mean that the regular rhythm of international trade would return, bringing with it more markets for exports of goods and services.
Currency experts also forecast a stronger euro in the case of a Biden victory, as the return to normal trade relations will move funds out of safe-haven dollars.
“A Biden administration would pursue a full reset after four years of Trump, restoring America’s historic commitment to responsible leadership on the world stage,” says Alex Soros, of the European Council on Foreign Relations. This would mean a return to the major treaties, and repair work at the World Trade Administration where Trump is currently blocking progress.
The Biden campaign last month unveiled clean-energy and infrastructure plans that included $2 trillion in spending over four years, with the goal of cutting carbon emissions from power generation to zero by 2030. Europe dominates in the wind power market, and so is likely to get a good chunk of that change.
But all is not roses in a Biden-win scenario for Europe. Biden has repeatedly supported the “Made in America” protectionist campaign, and that’s not good for Europe’s exporters to the US.
Now, what about a Trump win?
“Trump has undermined international institutions like the WTO, and started a trade war with China that has destabilised international business. We’ve muddled through four years of this, but it is likely to get worse if he is re-elected. For example, Trump has imposed sanctions on the firms involved in the Nordstream pipeline – more of that sort of thing can be expected. Europe will have to begin taking action, and relations with the US will become more tense,” Poitiers notes.
A January study by the Washington-based Pew Research Center think tank found that Germany’s confidence in Trump is relatively low, with only 13 per cent of Germans feeling confident in his leadership.
Cyprus would, of course, feel the brunt of the acceleration of Trump’s trade war with China and his disruption of the World Trade Organisation — Poitiers points out that Trump could actually withdraw the US from the authority.
It is interesting to note that British officials have reportedly approached senior US Democrats in a bid to “shore up cross-party support in Washington for a post-Brexit trade deal,” according to Business Insider.
But it’s too early to predict what might happen in a US election. “The opera is never over until the Fat Lady sings,” as Americans say.