Donald Trump’s return to the White House has hit the EU like a tornado. Until the end of 2024, concerns about trade dependencies remained primarily focused on imports from China. However, the US’ increasingly aggressive stance towards its trade partners has shifted attention to EU exports, demanding urgent and far-reaching adjustments.
Consequently, the EU must confront a dual challenge posed by both China and the US. This should serve as a lesson that achieving EU economic security requires a comprehensive approach. It is not just about imports and exports but also about cross-border investment linkages and the slow yet undeniable shifts in the global monetary system that shape how trade and investment take place. While the EU has been expanding its policy toolkit for a less benevolent global environment, many of the fundamental assumptions underpinning its economic framework – such as a stable rules-based system, free markets and reliable alliances – no longer hold.
In this new reality, developing new instruments alone will not be enough. The EU faces critical political choices, from its commitment to the WTO to the creation of a genuine EU industrial policy and the necessity, rather than the mere aspiration, of deepening its single market and turning its focus inward. These decisions will shape the foundations of its economic security in the years ahead.
This CEPS In-Depth Analysis paper is an updated version of the ‘EU economic security: Confronting the dual challenge of China and the US’, originally published in the Single Market Economics Papers series, to account for global trade developments up to 15 April 2025. The paper has received support from and was developed under the European Commission’s 2024 DG GROW Fellowship Programme.
