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Trust on trial: A year of 'rebalancing' US-EU ties

As Trump's return to the White House accelerated a realist policy turn, Europe spent 2025 grappling with a fractured alliance

By XING YI in London | China Daily | Updated: 2026-01-06 09:40
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A handler loads a shipping container onto a truck at the port of Barcelona, Spain, on July 7. At the time, the European Union was seeking a preliminary agreement with the United States to secure a 10 percent tariff rate ahead of an Aug 1 deadline, as both sides worked to avert a fresh escalation in trade tensions. ANGEL GARCIA/GETTY IMAGES

When Donald Trump was sworn in as president of the United States for a second time a year ago, European leaders felt prepared. After all, they had dealt with Trump's unpredictability during his first term, while the prospect of his return had been widely discussed in the media, with analysts drawing up scenarios and assessing the potential implications for Europe.

Yet, few anticipated the speed and breadth with which the new Trump administration would strain an already fragile trans-Atlantic relationship, pushing a traditional alliance rooted in shared values in a more transactional direction guided by an "America first" worldview. Trade partnerships, security alliances, and political coordination have been increasingly treated as bargaining chips.

For Europe, 2025 raised urgent questions about its relations with the US, as the trans-Atlantic schism widened and changed.

Over the past 12 months, Washington has repeatedly caught the continent off-guard, from threatening unilateral tariffs on "Liberation Day" to shifts in alignment over the Russia-Ukraine conflict, culminating in a provocative lecturing on Europe's internal policy in the US National Security Strategy paper.

Published in early December, the 33-page paper adopted unusually harsh language toward its allies, making explicit attacks. It denounced the European Union's transnational regulations as undermining sovereignty, claimed its migration policies were creating strife, and railed against government censorship of free speech and suppression of political opposition, parroting the tone of US Vice-President JD Vance's speech at the Munich Security Conference in February.

Moreover, the paper stated that US policy should prioritize "cultivating resistance to Europe's current trajectory within European nations" as well as "opening European markets to US goods and services and ensuring fair treatment of US workers and businesses".

It also demanded a structural shift in Europe's role within the alliance system, insisting that European states take responsibility for their own defense, abandon the expectation of an expanding NATO, and dramatically increase their defense spending.

"Certainly, this strategy continues to speak of Europe as an ally. That's good," European Council President Antonio Costa said on Dec 8, responding to the strategy paper. "But if we are allies, we must act as allies. And allies do not threaten to interfere in the democratic life or the domestic political choices of these allies.

"We need to focus on building a Europe that must understand that the relationships between allies and the post-World War II alliances have changed," he said.

A European Parliament research report also pointed out that the strategy constitutes "a fundamental break with the consistent assessment of previous US administrations" that permanent global dominance by the US is in the country's best national interest. Instead, it seeks to eliminate "global burdens" that it claims have been a drain on US resources.

Tariff tensions

This shift did not emerge overnight; it has been developing over years, nowhere more clearly than in the Trump administration's trade policy.

During his first term, from 2017 to 2021, Trump was already vocal on the trade imbalance with Europe, describing the EU as a "foe" on trade and claiming it was "formed in order to take advantage of the US".

Trade tensions between the US and the EU regarding steel and aluminum imports in 2018 were soothed with a quota system allowing a certain volume of EU steel and aluminum into the US duty-free. However, less than a month into his second term, Trump announced the return of tariffs on all steel and aluminum imports and the elimination of previous exemptions for allies, including the EU.

On April 2, the so-called Liberation Day, Trump imposed a blanket 10 percent tariff on all imported goods with higher, individualized "reciprocal tariffs" on dozens of countries.

Again, Europe was not spared. The EU's 27 members were hit with a 20 percent blanket tariff, while other European countries, including Switzerland, faced even higher rates.

European Commission President Ursula von der Leyen vowed retaliation, though remaining open to negotiations. The EU first announced retaliatory tariffs on 26 billion euros ($30.61 billion) worth of US goods, and later added more US products to the potential retaliatory list, including passenger cars, medical devices, and agricultural products, totaling nearly 100 billion euros.

"Unjustified tariffs on the EU will not go unanswered," von der Leyen said. "They will trigger firm and proportionate countermeasures. The EU will act to safeguard its economic interests."

The two sides then engaged in trade talks. Whenever negotiations stalled, Trump pressed with new tariffs and higher rates; when the EU offered concessions, Trump delayed the deadline.

After months of talks, Trump announced a US-EU trade deal on July 27 following a round of golf at his luxury Turnberry resort in Scotland. Despite von der Leyen describing it as "a huge deal" that would bring "stability" and "predictability" to both sides, its lopsided terms were apparent.

Under the framework agreement, the EU accepted a 15 percent tariff on most of its goods entering the US — the previous rate averaged out at 4.8 percent — while agreeing to eliminate tariffs on all US industrial goods and provide preferential market access for a wide range of US seafood and agricultural products.

The EU also promised to purchase US oil and gas worth $750 billion over the next three years, and European companies were expected to invest $600 billion across strategic sectors in the US.

However, the agreement provided little relief. German Chancellor Friedrich Merz said it would "substantially damage" his nation's finances, but conceded that "we couldn't expect to achieve any more". Francois Bayrou, then French prime minister, wrote on X, "It is a dark day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission."

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