THE NEW TRUMP ADMINISTRATION AND POSSIBLE CONSEQUENCES FOR THE EU

1. The new administration is likely to freeze on-going negotiations between the EU and the U.S. over the Transatlantic Trade and Investment Partnership (TTIP), the aim of which was to create a Transatlantic Free Trade Area (TAFTA). Freezing on-going negotiations may not substantially dame or even have an impact on the Atlantic alliance given that negotiations were stuck in a gridlock due to significant opposition in the U.S. and particularly in Europe.
2. The new administration may decide to pursue a radical form of protectionism, unless America’s trading partners agree to better trading terms with the U.S. Given the fragile state of the European economy, sharp tariff hikes would be gravely damaging to the EU
3. Given that the U.S. runs a substantial trade deficit with the EU ($ 134 billion in 2016) the new administration might implement protectionist measures.  Of all America’s trading partners, the EU represents the second highest deficit after China. Out of the EU 27 (excluding the UK) the U.S. records a positive trade balance with only 4 EU member states: Belgium, Cyprus, Luxembourg and the Netherlands.
4. The 1974 U.S. Trade Act allows the President to impose quotas and tariffs as high as 15% for 150 days on countries that have large balance of payments surplus vi-à-vis the U.S.. Therefore President Trump has the power to implement radical tariffs on the EU if so decides.
5. It is not improbable that Trump’s administration could raise tariffs on certain products coming from Europe to rectify the trade deficit.
6. The EU must respond vigorously and underline its ability to retaliate in kind. Despite the multitude of crises it is confronted with, the EU remains the largest single market in the world and the first trading partner for the U.S. Thus the EU is in fact in a more solid position that may appear to negotiate trade issues with the new administration.
7. It is essential and its Member States pro-actively dialogue and engage the new administration in order to reach mutual understanding on trade as soon as possible.
8. The EU must underline the central economic importance of transatlantic trade for both sides, and be ready to demonstrate good will by making some concessions to reduce the trade deficit. Even if the EU were to lose a little economically, it currently benefits from a very high trade surplus vis-à-vis the U.S. and can afford concessions to maintain healthy trade relations with the U.S. over the next four years.
9. While the new administration is intent on expanding bilateral agreements, it is absolutely clear on the EU side that as long as a country is a Member State of the EU, there are no negotiations bilaterally on any trade agreement with third parties. This is in the treaty and this is valid for all Member States as long as they remain Member States. 

2016 U.S. TRADE IN GOODS (Million U.S.$)

U.S. Negative Balance of Trade

1. Germany: -59,556
2. Ireland: -32,705
3. Italy: -25,904
4. France: -15,155
5. Austria: -6,423
6. Denmark: -5,338
7. Sweden: -5,330
8. Hungary: -3,158
9. Spain: - 2,982
10. Finland: -2,799
11. Poland: -2,142
12. Portugal: -2,105
13. Slovakia: -2,008
14. Czech Republic: -2,285
15. United Kingdom: -1,527
16. Romania: -1,157
17. Malta: -1,038
18. Estonia: -703
19. Lithuania: -675
20. Greece: -442
21. Slovenia: -379
22. Bulgaria: - 322
23. Croatia: -208
24. Latvia: -79

U.S. Positive Balance of Trade

1. Netherlands: + 22,148
2. Belgium: + 14,128
3. Luxembourg: + 921
4. Cyprus: + 56