Trump's upturning of trade risks five million European jobs

While the ideology underpinning US president Donald Trump’s disruptive trade policy remains uncertain, one thing is clear: the postwar settlement is quickly changing. The EU must take domestic action to protect jobs, but this new reality has far-reaching implications for the bloc’s trade strategy. 

The new reality really sank in for many during the security conference in Munich in mid-February. US vice-president JD Vance explained that the European security arrangement had come to an end, which was later confirmed by Trump.

Then, with the tariffs on steel and aluminium and the already historic press conference in the Rose Garden of the White House, Trump also put the knife in the second leg of the institutional postwar settlement: economic liberalism, underpinned by free trade.

As we in Europe are grappling with the consequences of these decisions, EU responses have so far been quite well-balanced and measured. Trade retaliatory measures against the US are currently on hold, but it is increasingly clear that further measures will be needed. 

Firstly, demand within Europe will have to be increased: we will need to spend more, jointly, but also in every member state and for this wages must increase and austerity must come to an end; and we will need to deepen our single market as a mere two percent increase in intra-EU trade will offset the impact of the tariffs. 

Secondly, our export markets must be expanded through new trade agreements. 

Chinese dumping?

Thirdly, Chinese goods that would have been going to the US and might now come our way. This will require an assertive use of anti-dumping measures as well as a way of tackling overcapacity.

Behind all the drama in news headlines, we find the reality that much of Trump’s disruptive and damaging politics will hit workers the hardest. The European Trade Union Institute estimates that about five million jobs in the EU are dependent on the export of goods to the US, mainly in the industrial sectors, but also in food production. This would come on top of already challenging conditions for workers in Europe facing deindustrialisation. 

For these reasons, the ETUC calls for a suspension of economic governance rules to allow for investments, a SURE 2.0 mechanism to mitigate the employment impact and support workers, as well as measures to prevent price-gouging and profiteering.

However, in the shadows, we now see the European Commission increasing its negotiating activity for new free trade agreements.

India, Thailand, Mexico, Mercosur

One with India and Thailand might be just around the corner. Recently, an updated agreement with Mexico was announced. Ratification of the Mercosur agreement is being debated, and the changed geopolitical setting has intensified that debate. All of these new free trade agreements will have important consequences for workers.

As trade unions, we have clear criteria to determine our support or opposition to trade agreements. The respect a democratic process with a role for trade unions from negotiation to monitoring and evaluation of the agreement is key.

Labour and social rights must be at the centre with clear binding clauses and strong enforcement mechanisms, including sanctions, to address violations of workers’ rights. The agreements must also lead to a genuine diversification, not create further dependencies, and ensure sustainable supply chains especially in critical raw materials and clean energy.

As the EU commission is finalising negotiations with various partners, let us therefore be clear trade unions will continue to demand meaningful involvement  and strong enforcement mechanisms to protect rights and ILO standards. These are not only part of European values, but are also what upholds European competitiveness and our social model.

Let us not, like the man who, in fear of death, committed suicide, give up on our European competitiveness and social market economy. 

As Europe and its security and economic architecture get a new footing, we must assure that our social model prevails. Workers and their unions must be fully involved at all stages in this process, and we stand ready to engage.