The EU leadership is willing to forge new alliances to overcome Trump's harsh trade policies and secure its borders without Washington's support.
Since President Donald Trump’s coming into office in 2017, US foreign policy has taken a sharp turn, changing the contours of economy, security and politics.
Trump's "America First" policy has now begun to hurt the US' relations with the European Union (EU). The Trump administration has already started a trade war with China, the EU and other strategic allies, imposing disproportionate tariffs on steel and aluminium goods.
In July, when the leaders of EU were preparing to meet in Brussels, Trump took pot shots at the North Atlantic Treaty Organization (NATO).
“The United States is spending far more on NATO than any other Country. This is not fair, nor is it acceptable. While these countries have been increasing their contributions since I took office, they must do much more,” Trump wrote on Twitter.
German Chancellor Angela Merkel called on Tuesday for an integrated European Union military, echoing language used by French President Emmanuel Macron last week that infuriated US President Donald Trump.
Merkel told the European Parliament it would not undermine NATO and would be complementary to it.
"The times when we could rely on others are over. This means we Europeans have to take our fate fully into our own hands," Merkel said.
Macron said Europe needed to protect itself against "China, Russia and even the United States" in a radio interview last week.
He went on the interview to talk about the need for a European army, citing the threat from Russia and saying that Europe needed to "better defend itself by itself, without depending solely on the United States."
US President Donald Trump attacked his French counterpart on Tuesday in a series of tweets that underscored how much the once-friendly ties between the two leaders have soured, just two days after returning from Paris.
Emmanuel Macron suggests building its own army to protect Europe against the U.S., China and Russia. But it was Germany in World Wars One & Two - How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!— Donald J. Trump (@realDonaldTrump) November 13, 2018
Macron said on Wednesday two long-time allies like France and America should treat each other with respect and that France was a US ally but not a vassal state, after President Donald Trump attacked him on Twitter.
After imposing tariffs on Chinese goods, the US introduced a 25 percent tariff on steel imports and a 10 percent tariff on aluminium imports on European countries, Canada and Mexico starting on June 1.
On June 20, the EU responded with retaliatory tariffs on goods imported from the US worth nearly $3 billion. Other countries adopted similar measures against the US.
Trump’s decision to pull the US out of the Iran nuclear deal and reintroduce sanctions against Iran was another reason why the EU became uneasy with Washington. The Trump administration mounted pressure on European companies, forcing them to stop trading with Iran.
As a result, the US' growing antagonism toward NATO and EU nations has pushed European leaders to consider options that are independent of Washington.
"In the past, when I was involved, we believed that our US economic and security interests are achieved when the security interests of our European allies are also achieved. That was our traditional approach," said Matthew Bryza, former US ambassador to Azerbaijan and White House official.
"But today under President Trump, he seems to be more focused on having a competition with our European allies."
The elephant in the room
With EU's retaliatory tariffs in place, Trump upped the ante by threatening them with a new 20 percent tariff on automobile imports from Europe. Never before had the US made any statements or moves against the EU's car industry. However, European Commission President Jean-Claude Juncker met with Trump in July, and he agreed to hold off the tariffs.
Trump said the Iran nuclear agreement, which included Germany, France and Britain, was a "horrible one-sided deal that should never ever have been made." He added that on May 8, the US "will be instituting the highest level of economic sanctions."
Though the US withdrew from the Iran nuclear deal, European countries stated that they would continue to preserve the agreement.
German Economy Minister Peter Altmaier has sharply criticised Trump’s tariffs and sanctions policies, saying such measures were destroying jobs and growth and that Europe would not bow to US pressure regarding Iran.
“This trade war is slowing down and destroying economic growth – and it creates new uncertainties,” Altmaier told Bild am Sonntag newspaper, adding that consumers suffered the most because higher tariffs were driving prices up.
“We won’t let Washington dictate us with whom we can do business and we therefore stick to the Vienna Nuclear Agreement so that Iran cannot build atomic weapons,” Altmaier said.
The EU, led by France and Germany, is working to create a European payment system independent of the US-dominated SWIFT (The Society for Worldwide Interbank Financial Telecommunication), which is currently being used. SWIFT enables users to send and receive information about financial transactions. It is used by more than 11,000 institutions across the world, preventing funding to terror networks and drug cartels. However, it is also used for banning transactions to Iranian and Cuban banks as it is heavily influenced by the US.
Europe needs to set up payment systems independent of the US if it wants to save the nuclear deal between Iran and major powers abandoned by President Donald Trump, said Heiko Maas, German foreign minister, in late August.
“That’s why it is indispensable that we strengthen European autonomy by creating payment channels that are independent of the United States, a European Monetary Fund and an independent SWIFT system,” Maas wrote in the Handelsblatt business daily.
"It is high time to re-evaluate our partnership … Europeans must become a mainstay of the international order, a partner for all who are committed to this order," Maas added.
The EU is one of Iran's most important customers for crude oil. The European companies’ need to trade with Iran is another battlefront with the US due to Trump’s determination to impose sanctions on Iran.
A smouldering dissent within the EU
French President Emmanuel Macron urged the European Union on August 30 to modernise its post-Cold War ties with Russia and pursue “strategic relations” with Turkey and other close neighbours, especially regarding defence matters.
The French leader claims that the EU cannot heavily rely on US protection in Europe while emphasising the importance of NATO. For the EU, it is crucial to promote its own defence capacities.
“It is in our interest for the EU to have a strategic relationship with Turkey as well as with Russia that brings stability, that will in the long term and bring more strength and coherency,” he told a news conference on a visit to Helsinki.
Simmering tensions with Turkey
Turkey and the US are currently experiencing rocky relations after Washington imposed sanctions on two Turkish cabinet ministers "both of whom played leading roles in the arrest and detention" of US pastor Andrew Brunson, who was arrested and charged with espionage and terrorism in Turkey.
Brunson is charged with spying for the PKK, a designated terrorist group in the US and Turkey, and the Fetullah Terrorist Organisation (FETO), the group behind the failed July 2016 coup in Turkey during which killed 251 people and injured thousands.
Trump ramped up his attack on Turkey by doubling US tariffs on Turkish aluminium and steel imports.
In retaliation, Turkey increased tariffs on several US-origin products, including alcohol, tobacco products and cars last month.
A more than 50-year-old strategic alliance has been strongly questioned and criticised by Turkey because of the US’ co-operation with the YPG, the Syrian branch of PKK, and hosting the leader of FETO, Fetullah Gulen, who orchestrated the failed coup in 2016.
Turkish President Recep Tayyip Erdogan will meet his French and German counterparts in September to discuss the latest developments, especially the US tariffs and threats.
What is next?
The US and the EU have shared common economic and military goals ever since the end of World War II, but for the first time, the relationship has been tested by President Trump's disruption of the old order.
It remains to be seen how far Trump is going to antagonise his allies and how long his allies can put up with him.
Though former White House official Matthew Bryza said "the contagion has spread between economy and security" of the US and EU countries, he also sounded optimistic about the outcome of this impasse.
"I don’t want to say nothing good comes out of presidents Trumps pressure but I think the way he negotiates is corrosive and caustic is dangerous," he said. "But again, in the end, we will find agreements with our European allies on trade just like we will find agreements with Turkey and our disputes and our geopolitical realities that bring us together will remain strong and will be okay."