Biden and the future of the transatlantic relationship

Rachel Lasko // 22 January 2021

Under the Trump Administration, the world watched America retreat from globalism, international cooperation, and a committed partnership with Europe. The Trump presidency fostered American isolationism through actions like terminating US participation in the Trans-Pacific Partnership (TPP) negotiations, pulling out of the Paris Climate Accord, and escalating trade tensions with the EU. The Trump Era marked a time in the transatlantic relationship where EU-US relations were strained more than ever, but the newly inaugurated President Biden does not immediately absolve the damage from the Trump administration, nor will it mean that the domestic America-first movement and momentum of Trumpism will go away.

The United States will attempt to rebuild its standing on the international stage over the next four years with a multilateralist strategy and returning to the use of institutions like the WHO and WTO. The Biden presidency will bring more opportunities for negotiation with Brussels; addressing areas like climate change, regulating emerging tech, and coronavirus will come easy, but there will continue to be frustrations in regard to protectionist approaches towards transatlantic trade, differing strategies on confronting China, and navigating digital taxation.

President Biden marked the start of his term by undoing the workings of the past four years of the Trump administration. The executive orders address a number of different policy points, from rescinding Trump-era immigration mandates to resigning the Paris Climate Agreement. Restoring relations with the EU has also been placed at the forefront of the Biden Administration’s agenda. Biden has already called for an end to the ‘artificial trade war’ with the EU and has committed to an EU-US Summit in the first half of 2021 where dialogues on Big Tech, taxation, and trade are planned to take place. Biden has aligned the new US environmental goals with those of the EU, pledging to pass a zero-emissions target by 2050. The administration even had its first talks with the EU regarding the countries’ shared environmental goals this week.

In regard to foreign policy, the Biden Administration will better align its interests with the EU on Iran, making commitments to re-joining the Iran Nuclear Deal and lifting US sanctions on the territory which were instated by the Trump Administration. It will no doubt be difficult for the US to navigate lifting sanctions on Iran since Iran remains in violation of key provisions of the nuclear accord. It is expected that Biden will engage in fresh talks with the EU in order to devise the strategy for moving forward.

The US and EU will continue to find themselves in agreement on an opinion towards China, but their interests with the country fail to be aligned. Biden has the need to work with China on climate and health crises, but it is unlikely that the administration will budge on its overall tough approach towards China and the issue of national security.

The EU will be in a precarious position when it begins discussions with the US on regulating emerging tech, data protections and 5G. Biden has made bold plans to invest $300 bn of public funds to support AI research, electric vehicles and 5G in an attempt to compete with China and have the US lead in emerging technologies. The EU expressed its interests to work with the US, proposing for a newly established EU-US Trade and Technology Council to collaborate and build up tech intelligence. The Biden administration has yet to respond to the EU’s dismissal of Biden’s plea to delay the agreement with China which may implicate how closely the US intends to collaborate with the bloc on 5G.

Digital taxation and differences in agricultural standards will continue to be difficult areas to find consensus. In the US, there is bipartisan support against a digital tax and talks between Washington and Brussels are likely to continue to be sensitive despite the new administration. Addressing the trade issue of diverging standards in agricultural practises has been cited as a priority by advisors in the Biden administration. Differences in agricultural standards have inhibited the free flow of goods across the Atlantic for years, and it will be very difficult to reach consensus on the protectionist positions that the EU and US hold.

Over the next four years, the US will undoubtedly produce more progressive policies and work to mend its strained relationships abroad. The complex political state of the US that Trump left Biden with may hinder just how radical US policies are able to be, leaving the US political agenda to be focused more so on resolving the matters at home, instead of Washington’s relationship with Brussels.


EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).

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