Europe Reacts to Trump’s Victory, With Liana Fix and Matthias Matthijs (Transition 2025, Episode 4)

LINDSAY:
Welcome to The President's Inbox. I'm Jim Lindsay, the Mary and David Boies distinguished senior fellow in U.S. foreign policy at the Council on Foreign Relations. This is the fourth episode in a special presidential transition series on The President's Inbox. From now until Inauguration Day, I'm sitting down with experts to unpack who will staff the Donald Trump administration and how it will likely approach the foreign policy challenges it faces. This week's topic is Europe's reaction to Trump's victory.

With me to discuss how governments across Europe are preparing for a second Trump administration are Liana Fix and Matthias Matthijs. Liana is a fellow for Europe at the Council. Her research focuses on European security, transatlantic relations, and Russia. She is also an adjunct professor at Georgetown University's Center for German and European Studies, and the Center for Eurasian, Russian, and East European Studies. Along with Michael Kimmage, she's the author of the popular "Ukraine Scenario" series at Foreign Affairs Magazine. She recently wrote a piece for Survival Magazine titled "NATO in Ukraine: The Peril of Indecision."

Matthias is a senior fellow for Europe at the Council and the Dean Acheson associate professor of international political economy at Johns Hopkins School of Advanced International Studies. His research focuses on Europe's political economy, the politics of economic ideas, and regional integration. He has written on all three topics for outlets such as Current History, Foreign Affairs, Foreign Policy, and the Journal of Democracy. He recently wrote an article for Survival Magazine titled "Europe's Leadership Void." Liana and Matthias, thank you for joining me on The President's Inbox, and congratulations on being so popular with the editors at Survival Magazine.

FIX:
Thank you, Jim. Great minds write alike.

MATTHIJS:
And great being back on the show.

LINDSAY:
Well, it's a pleasure to have you both here. Obviously, big news, Donald Trump will take the oath of office and become America's forty-seventh president on January 20th, 2025. I'd like to begin our conversation by getting your sense of what the reaction has been to a second Trump presidency across Europe. Maybe, Liana, we could start with you and your native country of Germany.

FIX:
Yeah, absolutely. The biggest news for Germany was certainly that immediately after Trump's election, the day after, the German government collapsed, the three-party coalition which has been incredibly popular throughout the last year in particular. So Merkel's legacy of bringing sixteen years of stability to Germany was not followed by a government that was able to score the same positive praise. But this also created a leadership void in the European Union because now we have a situation where Germany is without a government, probably until March, April next year, where President Macron in France is significantly weakened after his own parliamentary elections and where only in Warsaw with the pro-European Donald Tusk, and in Brussels with the Commission President Ursula von der Leyen, we see any kind of leadership and creative thinking about reacting to Donald Trump. The victory came as a surprise. There are some plans-

LINDSAY:
Why did it come into a surprise, Liana? The polls showed that the race was a toss-up, yet I have heard a number of people say they were surprised by the outcome.

FIX:
There's little I can say, Jim, than wishful thinking. There was an opinion poll in Germany that two-thirds of Germans were convinced that Kamala Harris would win just because they wanted her to win. So it was, to some extent, wishful thinking. And again, some preparations were done with the European Commission on how to respond to a tariffs war with Trump, but for the majority of the other capitals, the task just seemed too overwhelming to think about all the consequences for security, for economics, that a Trump victory would create. So the idea was, "Well, let's just wait this out and see how it goes." We have now some thinking that is going on, some thinking about a long-term package that one can offer to Trump, linking diverse policy fields from Ukraine to tariffs. So there is some thinking going on right now, but again, the lack of leadership from France and Germany will be a problem with Donald Trump, who wants to talk with big leaders, not with Ursula von der Leyen.

LINDSAY:
Matthias, let me bring you in here because I'd like to get your thoughts on the reaction in France, but also how the United Kingdom is reacting to this. Understood, the United Kingdom is no longer part of the EU, I don't want to convey the notion that I missed Brexit, but just give me a sense of what the reaction has been in those two countries.

MATTHIJS:
Yeah. So before I get to the two countries, I think it's safe to say that the vast majority of Europe wanted Kamala Harris to become the next president-

LINDSAY:
I think 92 percent of Danes, in a poll, said they wanted Kamala Harris.

MATTHIJS:
Exactly. You put your finger on it. You go to Scandinavia or Western Europe, the preference for Kamala Harris was much stronger than, say, going to Serbia or Hungary, and so they were these regional differences in preferences. For France and the UK, these are definitely two governments where both governing elites and, I think, significant majority of the population were also shocked by the outcome, and especially how clear this outcome was. There was definitely a narrative in the national media—in both UK and France—that bought into the late Democratic narrative that the polls were this time overestimating Trump's strength, and the quiet dream of a blue wave was very much there. There were people as different as Martin Sandbu from the Financial Times or former Tory government members that were convinced that Harris was going to win. This puts the new government in the UK in a particularly awkward position because-

LINDSAY:
Why is that?

MATTHIJS:
Some of them were openly cheerleading for a Harris victory, and famously-

LINDSAY:
Didn't they send party officials or strategists to the United States to pitch in?

MATTHIJS:
Close to 500 for Labor members, or Labor rank and file, Labour campaigners were shipped off to the United States to help the Harris campaign. Which, of course was heavily criticized by the conservative opposition, not least also by someone like Nigel Farage, who's close to Donald Trump. In France, of course, there is a leader who has dealt with Donald Trump in his first term. So Macron was sworn to office shortly after Donald Trump was. And yeah, the reaction is, "We'll make this work again somehow." But as Liana absolutely rightly points out, without much creative thinking about what would be different about this administration, and if the approach from last time, which was a combination of flattery, deal making, and hoping for the best, will work again.

LINDSAY:
Okay. I want to get into some of the specific issues that are likely to come up once Donald Trump becomes president. But before we do, I want to complete our tour of Europe and the reaction to Trump's victory. So far we have focused on what Donald Rumsfeld would have called Old Europe. I'd like to get some sense, Liana, from you, what has the reaction been in New Europe, particularly in what we would often call Central Europe? I take it that Viktor Orbán in Hungary is quite happy. But what has the reaction been, let's say, in Poland?

FIX:
Yeah. Absolutely, Jim. Viktor Orbán was happy because the victory of Donald Trump has empowered him in the EU. It will also be more difficult to criticize his authoritarian style of government in Hungary. But at the same time, he might be surprised, because being close to Donald Trump might not help him if he tries at the same time to be close to China and to Xi Jinping, something which will not fly in Washington. When we look at Poland, Poland always tried to establish a special relationship with Donald Trump—even in his first term—and Poland has a much better reputation with Donald Trump and his team than Germany, because Poland seems to be the country that has taken investments in defense seriously, that is a reliable NATO member. So Poland would certainly love to see that U.S. nuclear weapons, which are at the moment stationed in Germany, would be transferred to Poland.

And Poland hopes to use these old ties with Donald Trump, even though not anymore the Kaczynski brothers, the illiberal leaders of Poland before the last elections, are in power, but the pro-European Donald Tusk, they still hope that with the current Polish president, Andrzej Duda, they might have a chance to have a positive influence on Donald Trump. So the shock was not as great in Poland and, surprisingly and interestingly, in Ukraine, but I've also heard some of those voices in the Baltic States. There was hope that a Trump administration could actually achieve more for Ukraine than the slow bleeding out of the Biden administration's approach. That's at least how Ukraine perceives it. So Ukrainians were ready to roll the dice with Donald Trump, hoping that in his erratic way he might achieve more than the slow retreat that Ukraine is in right now.

LINDSAY:
Matthias, if I may, I want to redirect us geographically because we've really talked largely about what we might call Northern Europe. It's also a question of Southern Europe, and I'm just curious, from your vantage point, how you would assess the reaction in Italy, but also the reaction on the Iberian Peninsula. I was recently in Brussels at a meeting, and I noted that there were different views of U.S. foreign policy depending upon one's location, and my sense was the delegates from Spain and Portugal were least concerned about what might be happening down the road.

MATTHIJS:
Yeah, it's a good question. Very much the reaction to Trump's victory in Europe depends on where you stand politically. So when you're on the left of the political spectrum, like Pedro Sánchez in Spain, probably is more worried about the fact that Donald Trump is going to be in office again. But then they have the least to worry in the medium term because they are far away from Ukraine, for example. The key in many ways, and I don't think she's made up her mind, is Giorgia Meloni, the Italian prime minister, who of course has played the game very well since coming to office, being responsible on transatlantic relations, on Ukraine, and on the budget for that matter—all the things Brussels and the Commission cares about. The question is, and I think we will only be able to tell come January when the old new president is sworn into office, is what Giorgia Meloni will do. Will she show her true colors, which people worry about that care about Ukraine, and go back to the sort of Russophile, Euroskeptic roots and see Donald Trump as an ally here that strengthens her hand?

On the other hand, she relies on Europe for many other things. So it seems to me the center of gravity in Europe is still very much in favor of supporting Ukraine. And then spoiling that coalition, I think, will bring her more trouble than it's worth. One other thing I want to say, and I think we'll get more into this in a minute, is that so far, the signals from the incoming Trump administration are that as long as you're spending 3 percent of GDP on defense, and there is either an American trade surplus with your country, or at least balanced trade, you'll be fine. Which I find intriguing because I guess Latvia falls in that category, but there's no way you can not have tariffs on Latvia and put tariffs on, let's say, Germany and Spain, because, as I think Trump and Trump's people will have to relearn all over again, the European Union is a customs union and a common market that you treat as a whole and not in different parts when it comes to trade and economic policy.

LINDSAY:
Your predictive skills are really good, Matthias. We are going to get to that question. I just want to note at this point, we have established that Europe is a "they" rather than an "it," which creates some interesting dynamics in terms of diplomacy. And I will, at times during this conversation, refer to Europe as an it, but we all understand that there are diverse interests across the continent and also within countries. But let's talk about specific issues, Liana, and let's talk about the issue that I think is top of mind for many people in Europe, particularly in Central Europe, and that is how the Trump administration will handle Ukraine. What are people expecting? How are they reacting to what they expect, particularly, again, in Germany, which is going to have elections, what, in February?

FIX:
Exactly, in February. So on Ukraine, Europeans have accepted that probably there will be an attempt by Donald Trump to have a ceasefire. Not in twenty-four hours, but he will try to bring Putin to the negotiation table. And the hope in Europe is that this will not end up in a capitulation. And then the whole range of negotiation options that Trump has, there's a little bit of hope that Trump might actually use the coercive options, for example, threatening Vladimir Putin to increase sanctions, to increase military weapon deliveries, if he does not come to the table. But there is an even greater fear that Donald Trump will use incentives for Vladimir Putin, for example, suggesting a stop of military weapon deliveries to Ukraine, suggesting lifting of sanctions, which would be disastrous for the Europeans because they cannot replace especially U.S. military weapon deliveries.

They might be able to replace financial support for Ukraine. And obviously a lifting of sanctions on Russia would be seen as a huge victory by Vladimir Putin. So Europeans are trying to prepare for what they see as taking on more responsibility for Ukraine financially. They are certainly in discussions about NATO and European security, so with what proposal can they come to the summit in The Hague next year, end of June, to the NATO Summit, to convince Donald Trump that they are serious about their own security? Can they come to the table with a proposal to increase defense spending to three percent? And if yes, how will that be financed? Is there a possibility for joint debt in the European Union for emergency spending on defense, and so on and so on?

All these ideally are proposals that Europeans would bring to the table proactively. So actually, right now, contacting the people they know in the Trump administration, especially the ones who are more reasonable, and to try to shape the debate and to impose their own logic about Ukraine and European security on the Trump administration. But this leads us back to what we discussed before, the lack of leadership in the European Union at the moment. But on Ukraine, the agenda is pretty clear: take on more support for Ukraine—especially financially—and increase European defense spending. If Europeans will be able to achieve that is still unclear.

LINDSAY:
Well, let me ask you about that specific point, Matthias. And I'll note again, just before the election, I was in Europe and a number of Europeans from various countries were very proud to tell me that they had met the 2 percent of gross domestic product being spent on defense target, which was set back at the Wales Summit in 2014. And my response to them is that's so 2017. As you point out, the Trump administration is likely to have a much higher number. I'm not even sure if they'll be satisfied with three percent, but let's assume that they will be. To Liana's question, how is Europe going to pay for this, given that my sense is European economic growth is, how should we say, sluggish?

MATTHIJS:
No, you put your finger on the wound. There's a huge difference in approach if you go from east to west. The extremes are basically Poland and Ireland, or Estonia and Belgium. They think very differently about the need for this increase in spending, and they already feel like they've increased quite a bit. So that's the first thing where I think Liana's absolutely right, that you have a lack of leadership. And the only way you could have a collective increase in defense spending is you need some combination of the big EU states to push for this, and then you need to make it fiscally doable from a European fiscal rules point of view. And right now, you look at what Macron is dealing with in France, it's a 6 percent deficit. 58 percent is outlays, 52 percent is tax revenue, and most of the plans are now pushing in the direction of increasing tax revenue even further.

For what I imagine is a mostly American audience, this sounds crazy. This sounds crazy to a Dutch audience. This is not where the European consensus is. And so what European leaders have not done so far is talk about trade-offs: "This is what you'll have to give up if you want higher defense spending." I had already been pointing this out before this election because I said, "Once Trump actually becomes president, you're going to have to have a serious discussion about this." And the fact that you're now faced with a real trade threat from the United States—and, let's be honest—the European engine of growth usually comes through exports, especially from Germany, there's a lot of creative thinking that would have to happen here.

You could say, "Well, there is a report written by Mario Draghi that points in the right direction for all of these things." But so far, there seems to be very little willingness to actually implement much of this. And when they will implement things, I think they'll pick and choose things that are relatively low-hanging fruit. So it does worry me. I can see here, again, Rumsfeld's New Europe being much more proactive in this, and they have been already. But this, again, is going to be a very different exercise for Portugal, Spain, Ireland, Belgium, and places that are very much in the west of the continent.

LINDSAY:
Okay, Matthias, you've raised the issue of trade, so I want to stick with you and just pursue that for a moment. I think everyone is expecting there to be a confrontation, probably early on, between a Trump administration and the EU over trade policy. Donald Trump has made no secret of the fact that he believes America's friends, partners, and allies in Europe not only have free-ridden on America's security guarantee—not paying enough on defense—but have basically used their own tariffs to keep out American exports, and he wants reciprocity. So let's begin with the first question: is Europe ready for a Trump administration that is going to come in and presumably make some big asks, particularly on agriculture and automotives?

MATTHIJS:
The short answer is no, they're not ready. They're ready in theory, but not in practice. So the Commission has drawn up quite a long and extensive list, all the way from Harley Davidsons in Wisconsin to Kentucky bourbon, of-

LINDSAY:
But the Kentucky bourbon was the last time around, because Mitch McConnell was the Senate majority leader and thought that was the way to hurt him in his home state, the great commonwealth of Kentucky. I assume right now they would have to go for something perhaps in Louisiana, the home of the speaker of the House, or in South Dakota, where John Thune, the new Senate majority leader, is from.

MATTHIJS:
I'm sure they're updating the list as new appointments are being announced, but my understanding is Kentucky bourbon is still on the list, but I think it's probably dropped down a bit. So what we know from 2018-19 is that Donald Trump doesn't care so much about collateral damage to the United States. It's not like Iowa voted Harris this time because of the damage that was done to its agricultural sector during the previous trade war. So the 10 percent tariff I think we can almost take for granted. There is, of course, the saving grace—the beauty of the world's macroeconomy is that these things already adjust. I don't know if anybody's noticed, but in late August, the Euro was about 1/12 dollars to the Euro. Today, it's about 1.04. And people expect this soon to go back to parity. So this almost wipes out the 10 percent tariff from a European export point of view.

That said, if it's continuing to import LNG, so liquid natural gas, from the United States, which they've offered to do more of, again, in a deal making mode anticipating Trump's trade war, that's going to become a lot more expensive too, which is going to hurt competitiveness because they're using so much of more expensive energy. So the hope is that they can do what Jean-Claude Juncker, the predecessor of Ursula von der Leyen, did in 2018 or 2019 and basically promise Donald Trump to buy a lot of agricultural products and then not worry too much about actually delivering on this.

LINDSAY:
Liana, I want to come back to you on this because, obviously in terms of any EU negotiating position, where Germany comes down is going to matter an awful lot, but it's unclear right now who is going to be chancellor come late winter. I don't know if you have any predictions as to who's likely to be there, whether we're going to have a coalitional government, and what it is that they might be willing to do on this front.

FIX:
Yeah, actually, that was my little bit of optimism after the collapse of the German government that I was arguing. This is actually good news because the way the past coalition government has governed in such a dysfunctional way against each other would not have brought us into a good and strong position with Donald Trump. So with the elections, we might actually come out with a government that is more united, and this government will most probably be led by Friedrich Merz, who is the leader of the Conservative Christian Democratic Union in Germany that is polling at more than 30 percent right now in German opinion polls. He is one of the main political rivals of Angela Merkel, and he was sidelined by her leaving the Bundestag in 2009. So for him, this is his big comeback. This is the opportunity to become what he always wanted to be: German chancellor, the big German and European politician who leaves an impact on German and European history and politics.

So he will see himself, and his ambition will be to become no less than Helmut Kohl and Angela Merkel have been. And if he is lucky, he will be able to build a grand coalition, which we already had two times under Angela Merkel with the Social Democrats. And if we are all lucky, that will lead to a loosening of the debt brake, because exactly as Matthias had said, that is a huge challenge for Germany when it comes to defense spending and on the European level. And if both parties agree to a loosening of the debt brake, we might have fiscal flexibility in Germany, and then in the European Union. So there is hope, but then, on the other hand, elections are always surprising, and this prediction may turn out not to be true by the end of February.

LINDSAY:
You wanted to jump in here, Matthias?

MATTHIJS:
Yeah, a few things. Friedrich Merz would be, in many ways, the anti-Merkel from Donald Trump's point of view. They both hate her, so they could commiserate on the fact of how awful she was, is, and continues to be. And don't forget, Merz is the type that he's made a lot of money, just like Donald Trump. Not quite as much, but he owns a private plane, he enjoys flying it himself—not quite like Trump Force One, smaller. And he also enjoys telling off German voters, that they shouldn't be too jealous of people who are wealthy, that they should admire it. So he is a deal maker, and he fancies himself very much in that mode. Whether that will work, we'll have to see. Another thing I'll say, and this is why my own prediction, slight wishful thinking, but also I think it's feasible, of an even grander coalition where the Greens are part of it, too. That's what's known as a so-called Kenya coalition after black, red, and green, the colors of the CDU, SDP, and Green Party.

LINDSAY:
As opposed to the traffic light coalition and the Jamaica coalition.

MATTHIJS:
Traffic light. Jamaica. Exactly.

LINDSAY:
As soon as I learn all these names, they change the coalition, and I get confused again.

MATTHIJS:
Because if those three combined have a two-thirds majority—which you would need to rewrite or tweak or redo the constitutional debt brake—I imagine you'd need the Greens to agree on this, and then I'd imagine they'd want a part of this. What we don't know yet if that's going to loosen the rules in Europe. Merz has said very much, "No way." What it will do is make investing in Germany's economy easier, and I think that's the idea of some sort of golden rule, that Germany will have some more fiscal space. But the last thing they want is the French using this as an excuse to continue the way they've been going for the last few years.

FIX:
There might be perhaps a solution to that, which Poland proposed, that defense spending in the European Union is exempt from the debt ceilings of the European Union, so perhaps Ursula von der Leyen might find a creative way here. Just to add to exactly what Matthias said, the CDU actually has much better contacts to the Trump camp than the three-party coalition ever had. A popular, prominent CDU politician, Jens Spahn, former health minister, has traveled to Milwaukee to the Republican Convention. He's good friends with Rick Grinnell, who was the ambassador to Germany and who was hated by everyone, although some of his points about NordStream2 and defense spending actually turned out to be true in hindsight. So the relationship with Trump will be—and I fully agree with Matthias on that—more easier to handle for Friedrich Merz than it would be for an Olaf Scholz.

LINDSAY:
Matthias, let me ask you one more question on the economic front. I've heard a lot of talk that an issue that is going to be significant in U.S.-EU relations is going to be the EU's Digital Markets Act, and that the Trump administration is going to come gunning for it. What exactly is the Digital Markets Act and why is this something that the Trump administration wants to upend?

MATTHIJS:
So the Digital Markets Act is part of a whole different European approach when it comes to data privacy, when it comes to dealing with big tech giants, and so on. And I think what worries Europeans, rightly, and this was an offhand comment by JD Vance who said, "Well, the Europeans surely can't expect us to pay for their security if they're going to treat Elon Musk and X in the way that they have," and they're going to fine them and so on. That's where I worry the European Commission is not as equipped as it would like to be, and it cannot play this economic coercion game with the Americans, and the Chinese as well, because they don't do issue linkage. The director-generals in the Commission are specialized in trade, in internal market, in agriculture and things of-

LINDSAY:
You can't do trade-offs across sectors.

MATTHIJS:
Ursula von der Leyen doesn't have a political mandate to make these sort of trade-offs and make these sort of issue linkages that Trump very much can make. So what I think the only real positive or potential aspect of cooperation is on this front is to focus on economic security, where they both feel that there's a threat from China and that they could potentially cooperate on things like investment screening and export controls and things of that nature. But I think when it comes to anything digital, anything tech, especially now that Donald Trump—his co-president, as so many are calling him, Elon Musk— seems to be whispering in his ear all the time, has a very different idea of how to govern this and how to manage this. And I think there you could see definitely a big bust up between an EU approach and an American approach.

LINDSAY:
Liana, there's one other topic I want to get into, and that's the issue of China. And my sense is, at least at first glance, that Trump's national security team is going to take a very hawkish approach to China. Whether Donald Trump is on board with that approach, we can debate, but I think as the opening position, it looks like a Trump administration will put pressure on Beijing. This has raised real questions about whether the European Union, and Germany in particular, will be willing to go along. Obviously, Germany for a long time has relied on exports to China. And my sense is—I could be wrong—that many other European capitals are concerned that Berlin has been unwilling to let go of what had been, but no longer is, a successful economic relationship. How do you think about those issues?

FIX:
Yeah. So for the first term of Donald Trump, Europeans actually had the option to use China as a hedge. This will not be an option anymore for the second term, even if they hope to do so, just because Donald Trump will exert so much pressure on Europeans. And at the same time, China has changed and the way how China has developed from an economic competitor but still partner, to an economic and security rival and threat, especially with the support for Russia's war, will make it impossible for Europeans to use China as a hedge or to continue with business as usual. The problem in the European debate is that China, and especially the economic and the security relationship with China, is seen completely different from each other. So there's the economic relations, there is concern that especially Germany is not able anymore to get the profits out of the Chinese markets that they had, there is concern about Chinese EVs being dumped on the European market, to what extent that will undermine the European automotive industry. So that's the one bucket.

But the other bucket, that this economic threat is linked to a security threat, that China is the one country that allows Russia to continue the war against Ukraine and thereby pose a threat to NATO, is detached from each other. Europeans are not willing to counter China's aggression, China's support for Russia with significant sanctions. So that is something that a Trump administration will look at and wonder why that is the case. So why, on the one hand, do Europeans want U.S. investment and support in Ukraine and in European security, when on the other side, China is undermining all that and Europeans are not doing anything about it? And this will be a real dilemma for Europeans that they will have to address. And for Germany, it is a particularly big dilemma because the old model of Germany, cheap energy from Russia, China as an export market, is breaking away.

But German politicians are really slow at realizing it, so they find all other reasons, we are in a recession and so on, just to admit that China is the problem. And what colleagues, including our colleague Brett Setser, have written about, the China Shock 2.0 that will hit Europeans and Germans and lead to a loss of many manufacturing jobs, is not something that is already part of the political discourse in Germany. So on both fronts, China is an economic and security threat, and the way how the United States will leverage China against the Europeans, this is a very complicated and very difficult relationship for Europeans to manage in the next years.

MATTHIJS:
Yeah. Liana is absolutely right. But again, huge differences in opinion on this, let's not forget that even Eastern European countries who are hugely reliant on the German economy, on the automotive industry, that are hugely integrated, supply chains from Slovakia to Hungary to Poland, that there is no ready new market for German production if it's not going to be China. They already cut themselves off from Russia, and clearly it's not like this incoming administration in the United States is that hospitable to more German cars coming in. So the only-

LINDSAY:
They'll let the Germans build more manufacturing plants in South Carolina.

MATTHIJS:
Build more here. But that doesn't help the Germans in Germany. And so the obvious answer, again, back to the Draghi Report, is that you need to spend more at home and you need to rebalance your economy away from relying too much on exports. But that's not something you can do overnight. So the idea that the Europeans can decouple from China, in a way that many in Washington, DC want to do, is going to be a much longer process and a much more frustrating process.

LINDSAY:
Let me ask my final question, and it's a deliberately provocative one. Liana, do you think we've come to the point where it's time to bury the Transatlantic Partnership?

FIX:
Oh, no. Oh, no. Most definitely not. And I'm not only saying that because I'm a twentieth century person and historian who loves the lessons of the twentieth century and tries to apply them to the twenty-first century. The transatlantic relationship is so important for the United States and for Europe, for both sides. But we have to think about it—and this, actually, is Trump-speak—in more transactional terms. So it's not just a given that this relationship is special. Europeans and the United States have to make it special. And that means they have to work on a new deal on burden sharing and security.

So what's the trade-off between European security and Indo-Pacific security? How can Europeans relieve the burden of the United States in Europe? And they will have to agree on a new deal when it comes to economic relations. Only when there are mutual benefits in the relationship that even Donald Trump can see will the transatlantic relationship remain special because it just scales U.S. power to an extent that it would be unable to scale itself without. And this is an argument that Europeans have to make, but not just about value and history, but really about the concrete benefits that the United States gets out from this relationship.

LINDSAY:
Okay. I asked the question in part because Liana made the point that German politicians have been unwilling to acknowledge how much their economic situation has changed. And it leaves me wondering whether or not we in the United States and in Europe are similarly being unwilling to face or confront, we'll call it a brave new world. But I want to give you a chance, Matthias, to weigh in.

MATTHIJS:
Honestly, I think most of us—most in Europe, most everywhere in the world,—are still in denial about this, the Trump administration. If you think of this as the U.S. post-war world order, and the U.S. providing global public goods, be it freedom of the high sea lanes, the United States dollar and the Federal Reserve that's giving credit as a last resort, a market for distressed goods the way Charlie Kindleberger talked about it, where goods that cannot find a buyer always find their way to the U.S. because of the voracious appetite, insatiable appetite of the American consumer, I think that's ending. The American support for European integration is ending, the overt support, the enthusiastic support. And also, I think the Biden view of Europe isn't coming back either because it's not going to get you votes. So Europe really has to start thinking of itself as what's its interest? And it differs from the United States. And I feel like most people, especially in Eastern Europe, aren't there because of Ukraine and it's being so important to keep the Americans in.

But in the longer term, why do we want to, every four years, worry about a new president who may have even more radical ideas than Trump? So I imagine there's going to be a series of crises in the next four years where then it will hugely matter how the Europeans respond to this. And then what is the European offer to any new American president? This is why the transatlantic relationship continues to be important. But I feel like, to go back to what we started this podcast with, a leadership void in Berlin and Paris, if there's no thinking, if there's no leaders that can think further than five years ahead, then I fear that the U.S. will remain in a very powerful position to divide the Europeans, and Europe will muddle through but will be weaker as a result.

LINDSAY:
On that note, I'll close up this fourth presidential transition episode of The President's Inbox. My guests have been Liana Fix and Matthias Matthijs, fellows for Europe here at the Council. Liana, Matthias, as always, a true delight to chat with you.

FIX:
Thank you, Jim.

MATTHIJS:
Thanks for having us.

LINDSAY:
This presidential transition series is supported by the Carnegie Corporation of New York, working to reduce political polarization through philanthropic support for education, democracy, and peace. More information at Carnegie.org. Please subscribe to The President's Inbox on Apple Podcasts, YouTube, Spotify, wherever you listen. And leave us a review, we'd love the feedback. The publications mentioned in this episode and a transcript of our conversation are available on the podcast page for The President's Inbox on CFR.org. As always, opinions expressed on The President's Inbox are solely those of the host or our guests, not of CFR, which takes no institutional positions on matters of policy.

Today's episode was produced by Ester Fang, with Director of Podcasting, Gabrielle Sierra. This is Jim Lindsay. Thanks for listening.