European Union

The EU-US trade framework agreed in 2025 has held as a truce, but it has come under strain from three directions this autumn. Trump has threatened a 100% tariff on European countries that impose digital services taxes, a US official warned that a €3 billion European Investment Bank loan to Airbus put the trade deal at risk, and EU enforcement of the Digital Markets Act and Digital Services Act against US platforms continues (Reuters). European gas prices have risen about 140% since February because of the Iran war, and NATO allies are waiting for a Pentagon review of US forces in Europe expected by the end of the year (EUISS; AFP).

European governments welcomed the result with caution. German Defense Minister Boris Pistorius congratulated Democrats on a "historic victory" and said Berlin's commitment to cooperating with Washington was unchanged, Spain's Pedro Sánchez said American voters had rejected "policies that only impoverish" (Al Jazeera), and Norway's Jonas Gahr Støre called the result "a powerful political signal about a change of course" (NPR). EU diplomats told AFP they expected Trump to have "a freer hand" abroad, and an EU official said Brussels would not change enforcement of its digital rules but expected "more room to discuss" AI and cyber security with Congress (AFP).

Congress's relevance to Europe runs through specific levers. The NDAA can restrict troop withdrawals from Europe below set levels, appropriations can fund the European Deterrence Initiative, and a Democratic House can pressure the administration over the Russia diesel deal, which European governments oppose. Congress cannot remove the tariffs, which rest on Section 232 and Section 301 authority, and polling suggests Democratic voters are divided on removing EU tariffs at all (AFP). The DMA and DSA disputes are fought between the Commission and the executive.

The risk for Europe is that a constrained president turns his pressure on it. A constrained Trump can use the force posture review, digital-tax retaliation and pressure to buy US energy or ease Russia sanctions as tools that do not need Congress. European options include working with Democratic committees on Ukraine and troop levels, accelerating "buy European" defense procurement, and holding firm on digital enforcement, each of which signals that the EU is planning for 2029. Hungary under Prime Minister Péter Magyar is regaining access to EU funds, with the Council approving in July a new recovery plan worth about €10 billion (Council of the EU).