For fans of economic growth, Donald Trump is bad news. The US is the planet’s ‘growth engine,' powering wealth creation and technological progress while the rest of the world (such as Europe) languishes. We rely on America to drag us up with them. Trump’s tariffs and chaotic policymaking present the first serious threat to US growth in a generation, which has knock-on effects for Europe’s growth prospects.

Rather than just mitigating the damage, Europe should see this as an opportunity. As the US falters, the role of the world’s ‘growth engine’ is becoming vacant. Europe could step in to fill the gap. Liberal democracies outside the US should club together to slim down regulations, keep taxes low and simple, invite investment, and act as world leaders on growth and innovation. Despite the chaotic policies, the US is quite friendly with the British government and willing to listen to what Westminster has to say. This is a prime opportunity to cement a new pro-growth working relationship.

It is perhaps unexpected that Trump is on such good personal terms with British Prime Minister Sir Keir Starmer. Politically, they are almost opposites. Although Starmer is centrist rather than socialist, his cautious brand of politics contrasts dramatically with Trump’s rampant populism. Yet somehow, perhaps because of Trump’s affinity for the nation of Britain, the two world leaders seem to get on well every time they meet. This could be linked to the US president having partially British heritage and owning land in Britain, including his golf course in Scotland. There have been substantial material results from this agreeableness, such as the UK beating the EU to a favorable carve-out deal from US tariffs for certain sectors such as steelmaking.

Domestically, Sir Keir Starmer has insisted1 he will not ‘choose between’ pursuing closer economic ties with the US or the EU. There are many who have strong views on which of the two he should ‘pick’ ahead of the other. The subtext of that debate is whether Starmer should lean towards American-style free-market economics or concede to the supremacy of vast EU regulation over the British economy. In reality, there is no such trade-off. Starmer can forge closer ties with the EU while prioritizing growth.

The EU says2 it wants growth, much like3 the British government, and is willing to deregulate4 to achieve it. It’s time to put that claim to the test. Rather than getting hung up on politicking, summit-goers should focus their attentions on material ways both sides can lower barriers to trade and enterprise. From technology to agriculture, there is widespread potential for Britain and the EU to agree on mini-deals to facilitate cross-border trade, open up each other’s markets, and stoke growth.

The summit can become a crucial first step towards building a new, growing Europe. Growth is not rocket science. At its core, it requires politicians getting out of the way. It’s not about ideology; it's about sensible regulation. Want EU tech to grow? Pare back the Digital Markets Act5, GDPR6, and the AI Act7. Want more energy? Invest in nuclear8. Want Europe to be healthier and safer? Prioritize smoke-free policies9 like low tobacco taxes10, which keep tobacco out of the hands of criminal gangs. Want green growth? Strip back onerous environmental rules like CBAM, Farm to Fork, and the Green Deal.

The EU has already signaled its awareness of the gaps left in global markets by the US’s recent inwards retreat and its willingness to move to fill those gaps. The opportunities are not just in economic policy. In science, for example, Europe has spotted a chance to lure top American talent across the Atlantic Ocean to boost research and development and take advantage of uncertainty and ill-feeling in the US science community.

“The role of science in today’s world is questioned. The investment in fundamental, free, and open research is questioned. What a gigantic miscalculation,” said European Commission president Ursula von der Leyen on this subject. Hopefully, bringing in some of the world’s top scientists will help Europe steer clear of unscientific policies that rely on faulty data, like nicotine pouch bans, and instead prioritize innovation, low taxes, open markets, and simple regulations.

News headlines around UK-EU relations and their place in the world relative to the US may often hone in on defense and security agreements, but that is only half the story. The opportunity for a pro-growth Europe is immense. European politicians should grab the chance to become world leaders on economic growth before other, less favorable nations seize that power for themselves.

As America has become richer in recent years, the rest of the world has benefitted immensely. If the US no longer wants to fulfill that role, there is no reason why Europe can’t do it. Not long ago, the eurozone economy was roughly the same size as America’s. Today, the US economy is double the size. Europe has a lot of catching up to do. Let’s get started. There is no time to waste.

References

1 UK not choosing between US and EU, says Starmer.
2 EU Commission sees euro zone economy picking up, warns of US protectionism.
3 Reeves says UK must go 'further and faster' to grow economy after market nerves.
4 Commission proposes to cut red tape and simplify business environment.
5 Euroviews. The EU's Digital Markets Act is a double-edged sword.
6 The EU Needs to Reform the GDPR To Remain Competitive in the Algorithmic Economy.
7 Will the EU AI Act benefit the UK first ?
8 Brussels must fight to save nuclear energy in Europe.
9 The EU should scrap its tobacco tax hike and focus on smarter solutions.
10 I’m a non-smoker – but I still don’t want high cigarette taxes.