By ELIN JOENSSON
Global Business Journalism reporter
Europe's underperforming economy and the impact of the "Trump factor” continue to serve as a wake-up call for European leaders as U.S. President Donald Trump’s second term office unfolds.
Matti Posio, one of the longest-serving journalists in Finland covering international affairs, said Europeans see a ”terrible” second term under President Trump for their continent's already-shaky economy and their historical alliance with the United States.
”I’m sure we’re experiencing the biggest twist and turn there has ever been,” said Posio, who is the editor-in-chief of Lännen Media Oy. ”We’re looking at sort of an existential shock to our worldview.”
Many financial experts and senior correspondents agree that much of the uncertainty is owed to President Trump’s rapid-fire actions since regaining the presidency on Jan. 20 and their effects on a global scale.
”The question is how much damage will already have been done?” Posio told Global Business Journalism students at Tsinghua University on Feb. 25. ”Not only to America's and the West's standing in the world, but also to the American political system and democracy internally.”
The European economy sent scrambling
The first wave of President Donald Trump’s steel and aluminum tariffs are estimated to hit as much as €28 billion ($29.3 billion) of the European Union’s exports, Bloomberg reports. It accounts for a major escalation in the U.S. president’s trade war.
Speaking at his first cabinet meeting on Feb. 26, President Trump threatened to slap 25% tariffs on the EU, claiming – using crude language – that the alliance was “formed to screw the United States.”
The EU in turn said it will respond ”firmly and immediately” to ”unjustified” trade barriers and new tariffs, The Guardian reports.
”There will be a change in the way Europe makes decisions,” Posio states. ”Decision-making will have to be made more straightforward, and this has been a problem within the European Union system.”
These decisions could involve a much needed banking union and a capital markets union to reduce the pessimism about the European economic growth, as suggested by Larry Fink, CEO and founder of investment management firm BlackRock, during this year’s World Economic Forum.
Trump, American soft power and Chinese influence
Despite the challenges ahead, Posio predicted that Europe ultimately will come together. However, at this ”interesting moment in time,” massive uncertainty is hanging on President Trump’s actions, with their potential impact on a global scale being impossible to predict.
The veteran Finnish journalist said Trump's actions already had resulted in a "huge loss" in America's soft power around the globe while elevating the standing of China.
"China's influence is the world is on the rise just by the Americans going away," he said.
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