What will President Trump mean for Brexit and the EU?

It seems clear that the Trump Presidency will have a very different attitude to trade and foreign policy from its predecessors. That will undoubtedly have an impact on Brexit. Sir Simon Fraser, former Permanent Under-Secretary at the Foreign and Commonwealth Office, told the Institute that “the election of Donald Trump changes the strategic landscape against which Brexit will take place. We may also see further political changes in Europe. The UK needs to nurture strong relationships with both its American and European partners”.

What will a change of direction mean for the EU – and for the UK, as it prepares to reform its own trade and foreign policy outside of the EU?

New opportunities for US–UK trade

During the election campaign Trump opposed international trade deals on the basis that they undermined American industry and took jobs from American workers. Trump has said that one of his first actions on becoming President will be to abandon talks on the TPP and TTIP trade deals, and re-negotiate the terms of existing deals such as NAFTA. The EU institutions seem resigned to the collapse of TTIP – Bernd Lange, Chair of the European Parliament Committee on International Trade, said after Trump’s win that the deal is “history”. The TTIP agreement would have opened up the US market to EU goods and some services – its loss will be a blow to EU trade policy.

But for the UK, the end of TTIP may offer an opportunity for UK–US trade. When the UK exits the EU it will lose access to the EU’s free trade agreements – so it would not have benefited from TTIP. A United States with preferential access to the EU market may have seen a trade deal with the UK as a lower priority. The loss of TTIP may advance the prospects of a US–UK trade deal – indeed, Trump suggested as much during his election campaign, and it has been reported that UK minsters are already working on a joint agreement to boost trade between the two countries.

Securing such a deal won’t be straightforward – trade deals are becoming more complex than simply cutting tariffs on goods, and instead involve gaining access to each other’s’ markets in services and government procurement, and mutual recognition of technical standards. In addition, Trump’s anti-free trade rhetoric and his determination to protect American jobs and industry suggest that he will not agree trade deals easily – serving to complicate, extend or even derail talks with potential partners, including the UK.

Strengthening the UK’s hand on security

During the campaign, Trump suggested that he would only defend members of NATO if they met their defence spending pledges. He also hinted that he would seek to build relationships with Russia. The prospect of a more isolationist US foreign policy and thawing relations with Russia will be a major concern to the EU member states, particularly those on the Russian border. One of the first actions of EU leaders in response to Trump’s election was to call an emergency summit of EU foreign ministers; these issues are clearly at the top of the EU’s foreign policy agenda.

As with the demise of TTIP, the EU’s loss may be to the UK’s gain, at least in terms of boosting its bargaining power at the negotiation table. If the US does adopt a more isolationist stance, then ongoing security cooperation with the UK becomes more valuable. This could strengthen the UK’s negotiating hand in Brexit talks, as it could use the promise of ongoing cooperation on security measures to extract a more favourable deal from the EU.

Fighting a rising tide of populism

Aside from specific policy areas, the major impact of Trump’s victory on the EU is to demonstrate that the anti-establishment rhetoric which swept the Brexit campaign to victory in the UK was not a localised phenomenon. US voters have shown their distaste for the elite, their rejection of the political establishment and their desire for change. EU leaders face major elections in the coming months in France, Germany and the Netherlands – all of these countries have prominent anti-EU, populist parties. After Trump’s victory, they will be watching to see whether their own electorate vote the same way.

The threat of populist, anti-elite backlash may affect the EU as a bloc, as well as its member states. The challenge for pro-EU governments will be whether they can avoid becoming the ‘Hillary Clinton’ of Europe – the experienced, established, and ultimately losing candidate in elections where membership of the EU is a topic of debate. In order to reconnect with voters, EU institutions may come under pressure from member states (who set the political direction of the bloc) to change their position on controversial policy areas. In the longer term, the real impact of Trump may be a step change in EU policy: a move towards more restrictions on immigration and more protectionism in trade.

What would such a shift mean for Brexit? Timing is everything. EU leaders seeking to discourage anti-EU parties in their own countries may not be inclined to give the UK an easy ride, for fear of making leaving the EU seem like an attractive option. But then again, leaders seeking to shore up anti-EU, anti-establishment votes might look more favourably on a deal with a post-Brexit UK.