Aurore Lalucq, the chair of the European Parliament’s Committee on Economic and Monetary Affairs, is sounding an alarm that many in the Brussels bubble would rather ignore. The return of Donald Trump to the White House isn’t just a change in diplomatic tone. It is an existential threat to the European Union’s industrial base. If Europe continues to rely on a playbook written for the 1990s, it will find itself hollowed out by a Washington that views trade as a zero-sum game and a Beijing that has already mastered that same philosophy.
The core of the problem is that Europe is currently fighting with one hand tied behind its back. While the United States deploys the Inflation Reduction Act to vacuum up green investment and China subsidizes its electric vehicle sector into global dominance, the EU remains obsessed with internal competition rules and fiscal austerity. Lalucq’s "Europe at combat" stance suggests that the only way to avoid becoming a museum of 20th-century industry is to embrace a massive, centralized investment strategy. This isn't about protectionism for the sake of it. It’s about ensuring that the continent that invented the internal combustion engine doesn't become a mere consumer of foreign technology.
The end of the American security blanket
For decades, the European project thrived under a specific set of assumptions. Cheap Russian energy, booming Chinese markets, and an American security guarantee allowed the EU to focus on the minutiae of its internal market. That era is dead. Trump’s "America First" 2.0 goes beyond rhetoric. It targets the very heart of European exports through universal tariffs and a transactional view of NATO.
When Washington decides that steel and aluminum from its closest allies are national security threats, the old rules of the World Trade Organization become meaningless. Europe has spent years trying to save a multilateral order that its own partners have abandoned. The result is a continent that is over-regulated and under-capitalized. Lalucq is right to point out that waiting for a return to "normalcy" is a fantasy. The shift toward economic nationalism in the United States is bipartisan; Trump just says the quiet parts out loud.
The crushing weight of the investment gap
The numbers are staggering. Europe faces an annual investment gap of roughly 800 billion euros if it wants to meet its climate and digital goals while keeping pace with global rivals. Private capital alone cannot fill this void. The fragmented nature of European capital markets means that European savings often flow across the Atlantic to fund American startups, which then grow large enough to buy out their European competitors.
To fix this, the EU needs a fiscal capacity that matches its ambitions. This means common debt, a concept that remains a dirty word in "frugal" capitals like Berlin and The Hague. However, the alternative to common investment is individual member states engaging in a subsidy race against each other. If Germany uses its deeper pockets to save its own industries while smaller nations flounder, the single market will crack. True combat readiness requires a unified war chest. We saw a glimpse of this during the pandemic with the NextGenerationEU fund. That cannot be a one-off experiment. It must become the blueprint.
Regulating ourselves into irrelevance
Europe is world-class at one thing: drafting regulations. From GDPR to the AI Act, Brussels sets the global standard for how technology should behave. But you cannot regulate industries that you do not own. While European bureaucrats were perfecting the rules for digital privacy, American and Chinese firms were building the platforms that now dominate European life.
The obsession with "fair competition" within Europe has prevented the emergence of European giants. In the name of preventing monopolies, the EU has often blocked mergers that would have created companies large enough to compete on the world stage. This is a local mindset in a globalized world. If a merger between two European rail companies or telecom providers is blocked to protect a small price increase for consumers, the long-term cost is the loss of high-tech jobs to a foreign entity that doesn't care about European competition law.
The green transition as a geopolitical weapon
The transition to a carbon-neutral economy was supposed to be Europe’s big win. It was the "first mover" advantage that would secure the continent's future. Instead, it has become a vulnerability. By setting aggressive targets without a corresponding industrial policy, Europe created a massive market for green tech—which China promptly filled with subsidized solar panels and batteries.
Lalucq argues for a "Buy European Act" similar to the American equivalent. This isn't just about sentiment. It’s about survival. If European taxpayers are funding the green transition, that money should support European factories and European workers. The current model, where Europe provides the regulation and the subsidies while China provides the hardware, is a recipe for economic suicide.
The myth of the level playing field
The most dangerous idea in Brussels is the belief in a "level playing field." This concept assumes that if Europe just follows the rules, everyone else will too. It is a form of intellectual naivety that has cost the continent dearly. China’s state-led capitalism and America’s new industrial activism are not temporary glitches in the system. They are the new system.
Europe needs to stop being the world’s "useful idiot" in trade negotiations. This means deploying the Carbon Border Adjustment Mechanism (CBAM) with teeth. It means using anti-subsidy tools aggressively. And it means recognizing that economic security is national security. If Trump imposes a 10% or 20% tariff on all imports, Europe cannot respond with a polite letter to the WTO. It needs to have a list of strategic counters ready to go on day one.
A new social contract for a harder age
Economic "combat" isn't just about factories and tariffs. It’s about social stability. The rise of far-right movements across the continent is directly linked to the feeling of economic precariousness. When industrial centers decline, the political center collapses. Lalucq’s vision links industrial policy with social protection. You cannot ask workers to embrace the "green transition" if they see their jobs moving to South Carolina or Shanghai.
This requires a fundamental rethink of the EU’s fiscal rules. The Stability and Growth Pact, which limits national deficits, was designed for a world of low inflation and peace. In a world of high energy costs and rearmament, these rules act as a straitjacket. We are essentially telling member states to build up their militaries and green their economies while simultaneously cutting their budgets. The math does not work.
The energy trap
Europe’s greatest weakness remains energy. Even if the EU fixes its investment and regulation issues, it still pays three to four times more for electricity than the United States. This is a structural disadvantage that no amount of clever policy can fully overcome. The reliance on imported LNG to replace Russian pipeline gas is a stopgap, not a strategy.
The path forward requires a massive, coordinated build-out of nuclear and renewable energy, coupled with a redesigned grid that treats energy as a common European good rather than a national asset. This is where the "combat" mindset is most needed. Breaking the national interests of energy giants to create a truly integrated European energy market is a political fight that no one has been willing to finish.
The brutal reality of the next four years
A second Trump term would likely see the end of the US-EU Trade and Technology Council and a pivot toward bilateral deals designed to divide European nations. The "divide and conquer" strategy is effective because Europe is so easily divided. When Trump offers a special deal to a country that agrees to buy American weapons or ignore EU digital taxes, will that country stand with Brussels?
The answer depends on whether Brussels can offer a better deal. Currently, the EU offers rules. It needs to start offering power. Power comes from scale, and scale comes from deep integration. The choice is no longer between national sovereignty and European integration. It is between European sovereignty and becoming a vassal state of either the US or China.
Strategic autonomy is not a luxury
The term "strategic autonomy" has been mocked as a French vanity project. It is actually a survival manual. Autonomy doesn't mean isolation. It means the ability to choose your own path. If Europe cannot produce its own chips, process its own lithium, or defend its own borders, it has no autonomy. It is merely a passenger in a vehicle driven by someone else.
The shift toward a "combat" Europe requires a psychological break from the post-Cold War era. It means accepting that the era of globalization as we knew it is over. We are entering a period of regional blocs and economic spheres of influence. In this new world, being a "regulatory superpower" is like bringing a rulebook to a knife fight.
Moving beyond the rhetoric
Aurore Lalucq’s call to arms is necessary, but it faces massive internal resistance. There are still those who believe that the old order can be saved if we just show enough "leadership" or "dialogue." They are wrong. The shift in Washington is deep and structural. The rise of China is a generational challenge. Europe is the only major economic power that hasn't yet realized the rules of the game have changed.
The first step is a massive injection of public capital into strategic sectors. This must be followed by a radical simplification of the regulatory environment for domestic companies. Finally, Europe must develop a unified trade defense that is fast, flexible, and unapologetic.
Stop asking for permission to protect your own interests. The United States didn't ask for permission when it passed the Inflation Reduction Act. China didn't ask for permission when it cornered the market on rare earth elements. Europe is the only player still waiting for a referee who has already left the building. Build the factories, fund the research, and secure the supply chains. Everything else is just noise.
