Jan Strupczewski
BRUSSELS (Reuters) – U.S. President Donald Trump’s return to the White House is a wake-up call for European Union countries to repair their economies and become more competitive, top EU finance officials said on Monday after Trump was sworn in for a second term.
The 27-member EU has grown increasingly concerned over the past year about losing out to China and the United States in the race for new technologies, especially those that would help the bloc of 450 million people transition to an economy with lower greenhouse gas emissions.
Many European innovators are expanding their operations in the US, where access to capital is easier and companies are less burdened by bureaucracy.
In China, some companies receive heavy subsidies from the government to gain global market share, and the Chinese industry already has a dominant position in solar panels, electric cars, wind turbines and batteries.
“The new Trump administration should be a wake-up call for Europe,” Belgian Finance Minister Vincent Van Peteghem told reporters. “Instead of focusing on retaliation (against U.S. tariffs), we should be focusing on Europe’s challenges – the diminishing competitiveness and the widening productivity gap that we face.”
Instead of starting a trade war, the EU should boost its competitiveness and develop capital markets, officials said.
“To the election of President Trump, the best response … is to redouble our efforts to fulfill what we have already committed to do,” the chairman of eurozone finance ministers, Paschal Donohoe, told a news conference.
SPECIAL NOW RELATIONSHIP
Former EU trade commissioner Valdis Dombrovskis, now in charge of the EU economy at the European Commission, said that the European Union wants to preserve its special trade relations with the US, but not at any cost.
“We have to preserve those trade relations and that’s our initial approach, both bilaterally with the US, but also thinking about a rules-based multilateral trading system globally,” Dombrovskis said.
“At the same time, if there is a need to defend Europe’s economic interests, we are ready to do so, as we did during the first Trump administration.”
Polish Finance Minister Andrzej Domanski, who will set the agenda for EU finance ministers’ meetings until the end of June, said the key to success in dealing with the new US administration is for EU governments to stick together and strengthen Europe’s economic power.
“It is very important that Europe must remain united,” he said, adding that the EU must focus on lower energy prices for its industry and consumers, as well as reducing regulations.
“We need to focus on building the strength of the European economy. We need to focus on how to reduce energy prices. We need to focus on how to remove such a regulatory burden from European companies,” said Domanski.
French Finance Minister Eric Lombard said the change in the US administration meant the EU would have to double down on protecting its industry.
“This is absolutely critical through the Clean Industry Act and other tools we have in Europe,” Lombard said, adding that trade will also be a priority, as will the development of new technologies, particularly artificial intelligence.
