Trump's Trade Gambit: Will Europe Sacrifice Industry To Save Security?

As European leaders brace for five weeks of high-stakes negotiations with President Donald Trump, the stakes have rarely been higher—or more complex. The discussions are expected to touch on three interconnected fronts: continued support for Ukraine, NATO burden-sharing, and trade relations. But Trump’s approach, as seen in his previous term, will likely involve deliberately blurring the lines between these domains. For European capitals, the uncomfortable question now looms: will economic concessions be the price for continued security guarantees?

Trade as a Tool of Leverage

Trump has long treated trade policy not as a discrete issue but as a pressure instrument to pursue broader strategic goals. In his first term, the Trump administration imposed tariffs on European steel and aluminum, targeted German auto exports, and clashed with France over digital service taxes. The unifying logic was consistent—leverage trade to bend allies into alignment on other fronts.

Now, with a new term under way, European officials are bracing for a return of this tactic. Trump has already hinted that Europe’s “unfair” trade practices and lack of “sufficient” NATO contributions remain live grievances. If history is any guide, trade policy will again be used as a bargaining chip in negotiations around defense and Ukraine.

Europe’s Industrial Vulnerabilities

The economic consequences of such a strategy could be significant. Europe’s industrial core—particularly Germany’s automotive sector—is exposed. U.S. tariffs on European cars, which Trump previously threatened, would hit Germany, Slovakia, and the Czech Republic hard. Meanwhile, any disruption to agricultural trade would affect France and Spain, and U.S. opposition to EU tech regulation could provoke conflict over digital taxation and data privacy rules.

Business leaders across the continent are watching with concern. German manufacturers fear a replay of 2018, when Trump nearly imposed a 25 percent tariff on European cars. Meanwhile, digital companies worry about retaliatory measures if EU rules on data and AI are perceived as discriminatory.

These vulnerabilities put Europe in a difficult position. The threat of economic pain is real, and Trump knows it. He also knows that Europe’s economic unity is harder to maintain under pressure.

Security for Sale?

The deeper risk is that Trump may attempt to tie trade concessions to U.S. security guarantees. This linkage—whether explicit or implied—would amount to a transactional reordering of transatlantic relations. For example, Trump could delay imposing auto tariffs or soften his stance on digital services in return for higher NATO spending or a more assertive European stance on Ukraine.

The danger of such a quid-pro-quo is twofold. First, it subverts the idea that defense alliances like NATO are based on shared values and mutual interest, not fiscal transactions. Second, it places European leaders in an impossible position—prioritize national economic interests or broader security imperatives?

It also risks fracturing EU unity. Poland and the Baltic states, heavily reliant on U.S. military support, may favor concessions to keep Trump onside. France and Germany, more focused on economic self-determination and wary of strategic dependency, may resist. The result is a divided Europe precisely when cohesion is most needed.

Europe’s Strategic Bind

The core problem is structural. Europe has spent decades building a transatlantic system where trade and security were treated separately. Trump collapses that distinction. For him, everything is negotiable—alliances, tariffs, commitments, even norms.

Faced with this, the EU has few attractive options. Its economic weight gives it leverage, but only if used collectively. However, strategic interests diverge between member states, and the EU has no single voice on foreign policy. That makes it vulnerable to divide-and-rule tactics.

Moreover, the push for “strategic autonomy”—Europe’s long-term goal of reducing reliance on U.S. security guarantees—remains underdeveloped. Initiatives like PESCO (Permanent Structured Cooperation) and the European Defence Fund are steps forward, but they cannot fill the gap left by a receding U.S. commitment in the short term.

Diplomatic and Economic Countermoves

European leaders are not without tools. Diplomatically, there is potential to work with other U.S. actors—Congress, state governments, and the business community—to counterbalance Trump’s most disruptive instincts. Many Republicans in Congress remain committed to NATO, and U.S. firms benefit from open transatlantic trade.

Economically, the EU can double down on diversification, accelerating trade ties with other regions. Agreements with Latin America, Australia, and ASEAN are in various stages of negotiation. The more Europe can reduce dependency on the U.S. market, the more room it will have to maneuver.

However, time is limited. Trump’s pressure campaign will likely move quickly, especially with a series of international summits and bilateral meetings compressed into a narrow window. The question is whether European leaders can present a united front—or whether Trump’s strategy of entanglement will succeed in forcing economic sacrifices in exchange for temporary geopolitical stability.

Conclusion

Trump’s trade gambit is not just about tariffs or market access—it is about redefining the rules of alliance politics. By tying economic pain to strategic demands, he is testing Europe’s unity and resolve.

The next five weeks could shape not only the EU’s relationship with the U.S., but the future of the transatlantic alliance itself. Europe must decide: will it trade short-term security for long-term economic sovereignty—or find a way to resist Trump’s transactional temptations without forfeiting its own interests?

Either path carries costs. The challenge is choosing the one that Europe can live with.

Author: Gerardine Lucero