Europe's Trump Cards: Why the continent has more leverage than it thinks

Philippa Sigl-Glöckner, Mediha Inan, Aurora Li, Maximilian Paleschke, Janek Steitz and Sven von Wangenheim

Papers from Dezernat Zukunft - Institute for Macrofinance, Berlin

Abstract: Conventional wisdom holds that American material superiority leaves Europe with little room for manoeuvre. We dispute this. Raw power is not leverage. Leverage arises from asymmetric dependencies-the capacity to impose costs without incurring proportionate harm. Examining macroeconomic ties, product dependencies, financial markets, digital infrastructure, and energy, we find that Europe holds more cards than assumed: chokepoints in uranium enrichment and turbine supply, a USD 10 trillion consumer market US tech cannot abandon, and a coming LNG buyer's market. The US position is fragile too-Treasury demand depends on London's hedge funds, tech valuations require European consumers, and LNG exporters need Europe's premium prices. The United States cannot feast on global markets and retreat to its own shores at the same time. Europe has tools to make this contradiction costly but deploying them requires action: making the Anti-Coercion Instrument credible, expanding priority procurement powers, strengthening its digital position, treating the structure of financial markets and capital flows as geopolitical issues, and building intergovernmental capacity that includes the UK.

Keywords: Trump; Europe; geopolitics (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/337419/1/1960911708.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:dzimps:337419

Access Statistics for this paper

More papers in Papers from Dezernat Zukunft - Institute for Macrofinance, Berlin
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().