Can – and should – the EU align with US economic security policy?
Varg Folkman (Policy Analyst, the European Policy Centre)
Introduction
Back during Europe’s summer of discontent in 2025, it went somewhat overlooked – amidst the larger trade story – that the EU, in its Turnberry Deal with the United States, had promised to “strengthen economic security alignment” between the two entities. The deal itself ended the period of high uncertainty in Transatlantic trade reigning through the spring, in an unbalanced way. EU tariffs on most US goods were lowered to zero, while the bloc faced a flat 15% tariff when selling goods to the US.
When looking at the EU’s economic security tools and policies, there seems to be room for aligning specific tools and policies, such as investment screening and critical raw materials procurement. However, there is a larger question left unanswered; namely, whether hewing closer to the Trump administration on such policy is advisable. With the Obama and Biden administrations, policy cooperation was mostly predictable and could be planned in advance. With Trump, especially in his second term, this is not the case. Under the Trump administration, and Trump himself, US policy is personalised and subject to change at Trump’s whim. Aligning with his policy preferences today may not ensure alignment tomorrow.
Prior to any such consideration, though, is an even broader question: Are EU and US policy makers even talking about the same thing when they’re talking about economic security?
EU and US economic security approaches
As policy term, economic security is a slippery phenomenon, which broadens or narrows depending on the eye of the beholder. In its Economic Security Strategy, the European Commission draws a line between national and economic security, while acknowledging that some risks overlap between the two. Rather than providing a straightforward definition, the EU executive frames supply chain vulnerability, economic coercion, technology leakage and critical infrastructure security as the core of economic security.
This concept was inspired by and followed in the tracks of the Biden conception of economic security, famously articulated by then-National Security Advisor Jake Sullivan as “a small yard and a high fence.” Under this approach, the Biden administration used strict export controls and import- and investment-restrictions targeting cutting-edge technologies. This was combined with an active industrial policy to build domestic manufacturing capacity.
While the Biden administration’s use of export restrictions and industrial policy blurred the lines between economic and national security, the Trump administration seemingly sees no difference between the two. As the White House declares in its America First Investment Policy: “Economic security is national security.”
The EU is still operating based on its 2023 strategy – although with an update in December 2025 – and that strategy’s demarcation between national and economic security. The Americans, on the other hand, are freely mixing economic and national security concerns, while its concrete policy often changes with the moods of the president himself, exemplified by Trump’s abrupt decision to let semiconductor designer Nvidia sell previously banned goods to China.
In its new modus operandi, broad protectionist trade policies are defended by the Trump administration as necessary to enforce national and economic security goals, while trade partners are being coerced into skewed trade deals that lock them into US economic security priorities. While protectionist policies can be a tool to create the conditions for economic security, Trump’s use of them are undermining the country’s leverage.
Given this conceptual confusion and the widespread use of economic coercion by the US to bend others to its will, it is unclear how the EU can align with its nominal ally – the US – on economic security policy. Furthermore, it’s unclear if the Americans are seeking such alignment in earnest or just trying to bend allies to their own priorities.
Further complicating the picture is the broader US disengagement from Europe. US troops are being withdrawn from Europe, its engagement on Ukraine is shaky and its energy is being spent in its geographic neighbourhood – the so-called “hemispheric defence,” as former Trump strategist Steve Bannon has termed it. Moving closer to increasingly harsh US economic security policies as the American security umbrella grows ever patchier is a risky endeavour. EU alignment with US policies could lead to clashes with the Chinese. US support in the event of Chinese countermeasures against the EU is far from guaranteed.
“America first” has been Trump’s guiding principle until now, and any consideration paid to nurturing alliances has been secondary at best. While the US reprioritises resources at home, coercive economic tools have become its preferred way of securing compliance with its policy. The renewed transactionalist thrust allows the US to put pressure on individual EU member states to change or undermine broader EU policy. As a collection of 27 states and beholden to unanimous decision making in many key areas, the EU is vulnerable to such rule and conquer tactics.
Secondary sanctions and extraterritorial laws are effectively used to force allies into line with US priorities – the Nexperia saga proving an illustrative example. Nexperia is one of several strategic EU companies based in the Netherlands. It produces semiconductors, although not cutting-edge ones. After being bought by Chinese Wingtech, tensions grew with the US, which is seeking to claw back certain important assets acquired by Chinese companies. In December 2024, the US placed Wingtech on the entity list, entailing restrictions on sales of US goods and intellectual property. Combined with its new subsidiary rule, this move strangled Nexperia’s access to US inputs. While the Dutch government had wider concerns about Nexperia’s Chinese owner, the US moves forced its hand in the case, effectively taking national control of the company. This led to a decision by Chinese authorities to impose export restrictions on sales of Chinese-made semiconductors to Europe (for a detailed account of the saga, see here).
Extraterritoriality and the effects of secondary sanctions are not new to the second Trump administration. Developed during successive US administrations during the 2000s, Trump’s first administration used these tools extensively, contributing to the EU’s original turn towards strategic autonomy and development of the Anti-Coercion Instrument to counter the US policies.
Conclusion
As exemplified by the Nexperia case, as well as the wide use of trade barriers and sanctions to force other countries to follow US policy, it seems unlikely that the EU will be able to avoid being forced into partial alignment with US economic security priorities.
This becomes especially acute as the EU is caught in the middle of the clashes between the US and China. It is imperative that the EU gains full control of its own tools and policies to chart its way through the waves the situation effectively creates, but that is becoming increasingly difficult. As the US forces the EU’s hand, the perception of the EU as an American appendage grows more entrenched.
In the background lurks another issue: The lack of a coherent EU policy on either the US, or China. There is no agreement among the member states on taking a tough approach on either, making it easier for the US and China to lean on diverging member states to undermine EU consensus.
US economic security policy is currently fluid and subject to Trump’s kaleidoscope. Aligning with such a temperamental and contradictory policy is not advisable. Rather, the situation demands that the EU break free from the coercive hold of its erstwhile ally.
This blog is part of the CELIS-L&G special blog series.
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