How Germany and the EU Slept Through Trump’s Watershed Moment – The American Spectator | USA News and PoliticsThe American Spectator

While Donald Trump proclaims a new Declaration of Independence for the United States, Europe is sleepwalking through this historic shift. The state of European politics can best be captured by looking at the formation of Germany’s new government: sluggish, backward-looking, and obsessively state-centered.

No matter what is happening in the world, the political establishment in Berlin remains stuck in the status quo ante. Coalition negotiations between the CDU/CSU and SPD reveal that Berlin has failed to grasp the significance of Washington’s tariff salvos; it either cannot or will not see that we are witnessing the dawn of a new era. A global struggle for productive capital has begun, and the age of artificial economies — sustained only by cheap credit and repressive regulation — is drawing to a close.

The German coalition agreement breathes the stale air of the 1980s, a time when an ascending nation like Germany could still afford its welfare illusions. Once again, it is cheap credit — around a trillion euros of new public debt — that is expected to hold the coalition together over the next four years and sustain the illusion of German prosperity.

Stubborn Euro-Socialism

The coalition talks offered a panoramic view of today’s Euro-socialism. Structural reforms, a dismantling of the bloated state in the spirit of Argentina’s Javier Milei, or meaningful deregulation to unleash growth forces — none of these are on the table. Instead, Friedrich Merz (CDU), often stylized by the media as an economic expert, appears to be knowingly accelerating the liquidation of Germany’s remaining market economy. Rather than betting on the free market to overcome recession, policymakers rely on artificial state demand. (RELATED: Argentina’s Milei Keeps Up Reform Momentum)

To that end, a flood of roughly a trillion euros in new German government bonds is set to inundate the global bond markets over the coming years. This avalanche of debt is intended not only to jolt Germany’s recessionary economy but also to inject fresh momentum into the sluggish EU economy — a flash in the pan designed to paper over the disastrous economic policies of recent years. (RELATED: The Euro’s Paper Empire: Germany’s Big Bond Gamble)

These bonds are desperately needed as collateral in the euro-dollar market following the end of LIBOR-based lending. Since the advent of America’s SOFR (Secured Overnight Financing Rate) system, dollar loans now require real-dollar collateral at market interest rates, ending the era of London’s artificial low rates. The Eurozone’s credit engine, in desperate need of new fuel, turns to German sovereign debt as a replacement.

At the same time, the towering mountain of public debt forces central banks to manipulate interest rates to avoid the mathematically inevitable collapse of public finances. Christine Lagarde’s ECB will continue to liquefy political nonsense. Europeans can thus look forward to more wind turbines sprouting in forests and fields littered with subsidized solar panels.

Through his Keynesian debt maneuver, Friedrich Merz is unleashing enormous collateral damage. Capital urgently needed by the private sector to produce goods in actual demand is being absorbed by the state for debt servicing. It is this naive faith in the healing power of state intervention that has led to the ongoing debt crisis and the erosion of Europe’s social safety nets. Europe is now doubling down on its journey into economic no man’s land.

Trump’s Industrial Renaissance

Meanwhile, Donald Trump is pursuing a dual strategy to reindustrialize America. Tariffs are pressuring companies to relocate production back to U.S. soil, while corporate tax cuts (slashing the corporate rate to 15 percent) and massive investments in AI, robotics, and space exploration aim to establish a modern industrial base.

Yet this policy targets a deeper problem: it seeks to reverse the socioeconomic hollowing out of the United States. Decades of outsourcing had drained the nation — over 5 million manufacturing jobs were lost between 2000 and 2015 alone. Once-thriving industrial cities like Detroit crumbled, and the fentanyl crisis, with over 80,000 deaths annually, bears witness to the social despair caused by the collapse of America’s economic opportunity landscape.

Trump understood that a nation without an industrial heart loses its soul. Domestic value creation does more than create jobs — it gives communities pride, purpose, and a future. Local production — from semiconductors to electric vehicles — strengthens Main Street.

New factories in Ohio and Texas not only provide employment but revive entire regions: mom-and-pop shops are reopening after the COVID lockdowns, schools are being renovated, and young people once again envision a future in their hometowns. Identity and belonging are being rebuilt — the cornerstones of healthy societies.

A New Declaration of Independence

An industrial renaissance may well become the salvation of America’s battered soul. True innovation occurs where value chains are tangible — in workshops, not hedge funds. An engineer working on robotics in Michigan sees himself as part of a greater endeavor, not a mere cog in a globalized machine. Trump’s project is nothing less than a reconquest of American identity — something the globalist elites of Europe avoid like the plague.

As the U.S. races to improve its investment environment, it becomes a magnet for capital seeking real projects rather than speculative returns. Europe watches cynically and mockingly, blind to the fact that Trump’s strategy may mark a bifurcation point in global economics and societal development.

This transformation is taking place in a country that, since the Obama years, had moved closer to the European model of interventionist welfare economics. Programs like ObamaCare and America’s spiraling fiscal situation exemplify the most un-American ideology imaginable — a diluted form of socialism.

Yet now America is not only ideologically but also materially turning away from Europe. Berlin and Brussels continue to fight a losing battle: scrambling for cheap credit and defending an artificial economy built on climate ideology and moralism. (RELATED: Germany’s Suicide Pact with Green Ideology)

Europe’s response to Trump’s offensive remains fundamentally defensive: the European Commission timidly offers tariff reductions, and the Supply Chain Act is postponed (only to be reintroduced with greater force later?). Yet there is no true reform spirit. European media mock Trump as an “economic destroyer,” unable to grasp the deeper reconfiguration of the global economy.

Those who fail at diagnosis are bound to prescribe the wrong therapy.

Energy Independence: The Strategic Objective

Flying over Donald Trump’s agenda is the American flag, adorned with a single word that feels like a warning: Independence! This especially applies to the energy sector. At the core of every economy lies the question of energy generation and availability. (RELATED: Getting Back to an ‘America First’ Energy Policy)

Europe, historically energy-poor, has long pursued an exclusionary strategy: through the CO₂ narrative, it has sought to pressure energy-rich countries into forsaking oil and gas — an attempt to level the playing field for a continent that imports around 60 percent of its energy needs. (RELATED: Europe’s Green Energy Policies Bought Russia’s War Machine)

Europe’s Green Deal is the political manifesto of this endeavor. It is a thinly veiled attack on industrial margins, designed to ultimately crush them. Announcements of plant closures by companies like Volkswagen or BASF’s move abroad are not isolated warnings — they are symptoms of systematic deindustrialization.

Through relentless new regulations, CO₂ taxation, and bans on combustion engines, Brussels is driving European industry out of the continent. Since the start of the Ukraine war, German energy prices have risen by 80 percent, stripping energy-intensive companies of their competitive edge, regardless of their innovation or creativity.

Meanwhile, the United States — the world’s largest oil producer — has gone on the energy offensive. Controversial projects like the Dakota Access Pipeline, long stalled by NGOs such as Greenpeace and political opposition, are now being fast-tracked. Nuclear energy is experiencing a renaissance, while Germany prepares for dark, windless nights reliant on heavily subsidized renewables. The outcome of this unequal battle is already clear.

The Real Enemy Within

Yet Donald Trump is not Europe’s true enemy. Nor are his policies, his administration, or even his often unconventional communication style the real threat. The real adversary lies deep within Europe’s soul: a pervasive insecurity in the face of an approaching storm.

This storm carries the seeds of profound change — the end of globalism and a return to power politics. It demands a renewed understanding of economics and the re-emergence of meritocratic values: one must sow before one can reap. Over decades of welfare-state illusions, many Europeans have forgotten this basic truth.

People instinctively sense that major narrative fractures are looming: the end of the welfare illusion, the failure to vanquish the specter of man-made climate change, and the demise of Europe’s delusions of geopolitical grandeur. The storm Donald Trump has unleashed will bury these immunizing pseudo-certainties.

The European longing to offload existential anxieties onto an ever-expanding state is deeply ingrained. That this monstrous bureaucratic entity now reacts to change with increasing repression — developing a bizarre fetish for control, exemplified by initiatives like the Digital Services Act — is merely symptomatic of a broader decline that becomes more visible every day.

READ MORE from Thomas Kolbe:

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