US Elections impact on EU: a brief opinion
The U.S election has reached its peak and it is heading to a conclusion. With uncertainty on the result, EU political and business figures are keeping close attention to every development regarding the next leader of the free country.
The following article will take into consideration the actual sentiment of notable individuals regarding the effects of the election on European interests including a short commentary by Yan Incorporation.
In contrast to the idea underlying this piece, many parties doubt that a significant change will occur. Their reasons mostly lie in the fact that EU-US relations have soured over the years. While Trump’s actions on tariffs surely deepened the wounds, it is clear that “America first” is an approach widely embraced by powerful forces within the country.
Bruno Le Maire, French Minister of Economy and Finance, explicitly convenes the above argument with strong and direct words:
"Let's not kid ourselves: The United States has not been a friendly partner to European states for several years now"
The likely Joe Biden’s presidency is bound to conduct itself on diplomacy and cooperation given the divisive politics of the previous administration. However, it is up to debate whether this positive climate will be employed in external relationships.
On another note, it is important to realize that foreign policy will likely be the last item of discussion in the US government’s agenda as a result of the widely spread domestic issues. Another key point is the trend on self-reliance which has gained momentum in the members of the European Union and has been confirmed as a path in the 2019-2024 strategic agenda.
Gero Jung, Chief Economist at Mirabaud Asset Management, notably summarises all themes into a bottom line:
"First of all, the US economy is a relatively closed one. If you look at GDP numbers, exports represent about 15% of GDP. That is important to keep in mind.
The second point is the eurozone recovery…[so far] in the third quarter is really driven by higher demand from Asia from China. Chinese companies are refilling their stock, bringing up their inventories again”
In conclusion, albeit Biden’s projected win is a positive outcome in the political landscape, from an economic point of view, much ambiguity is present.
As for business to business interactions, it is not bold to assume that decisions will weight on the possibility of opening branches in the American territory or reconsider deals altogether.
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