BRUSSELS — If Europe wants to avoid a trade war with Donald Trump, it has to buy more from the U.S., boost defense budgets and deregulate to make the EU economy stronger, Italian Foreign Minister Antonio Tajani told POLITICO.
Tajani argues there’s a deal to be made with the transactional U.S. president, recalling that he met Trump in 2017 when he was president of the European Parliament. “He was much more pragmatic than one could think,” said Tajani.
Trump is threatening to hammer America’s rivals as well as its allies — ranging from Canada and Mexico to Colombia and Denmark — with tariffs to get them to fall in line with his demands. One way to dodge that bullet is to create “a virtuous climate” by purchasing more goods from the U.S., the Italian minister said.
One of Trump’s perennial beefs is that the EU has a trade surplus with the U.S.
Trump in the White House is a “wake-up call” for Europe on everything from trade to defense, Tajani said.
Spending laggard
The problem for Rome is that it doesn’t have much credibility on military spending — a key metric for Trump, who has repeatedly threatened not to defend countries he feels are free-riding on the U.S.
Italy is spending 1.57 percent of GDP on defense, one of the lowest levels in NATO and well below the alliance target of at least 2 percent.
And that target set in 2014 will almost certainly be boosted later this year. Trump wants it to rise to 5 percent, a figure supported by Poland, Estonia and Lithuania. NATO Secretary-General Mark Rutte has said the new goal will be “north of 3 percent.”
That’s not good news for Italy, which aims to reach 2 percent in 2028.
“I’m in favor of spending 2 percent, but you must not force me to cut health care,” said Tajani, adding: “First we get to 2, then we talk about 3.”
To spend more, Rome will need help from Brussels.
Italy wants the EU to exclude defense spending from the Stability and Growth Pact, which limits public debt to 60 percent of GDP and deficits to 3 percent. Italy meets neither marker. Its deficit is expected to fall below 3 percent only in 2026, and debt is expected to be 139 percent by that year.
Another way of boosting defense spending is to use EU resources. The bloc could use unspent cash from the €800 billion Covid recovery fund for defense, or issue joint debt — an idea Germany and other frugal countries oppose.
Tajani also mentioned using the European Stability Mechanism, a tool with a maximum lending capacity of €500 billion that eurozone governments created during the 2011-2012 euro crisis to support member countries.
Despite lagging on defense, Italy has access to Trump thanks to PM Giorgia Meloni, the only European leader invited to his Jan. 20 inauguration.
Tajani has already spoken to new U.S. Secretary of State Marco Rubio.
They discussed Ukraine, with Tajani saying Rubio insisted the U.S. “won’t give up on Ukraine.” Tajani also said the U.S. “must be present in Africa, in the Mediterranean.”
Tajani downplayed the risk that Trump will follow through on his threats to seize Greenland from Denmark.
“I don’t think Trump will invade Greenland,” he said.
But the main takeaway from the new Trump era is that Europe must do more to stand up for itself, Tajani said. “We must accelerate a path to be stronger and complete the banking union, the single energy market, fiscal harmonization, European defense.”
“Europe must not be strong only in imposing rules, it must be strong politically and economically,” he said.
