But in Brussels, senior officials privately describe the wealth tax revival as something darker—a symptom of shrinking options at precisely the moment Europe can least afford strategic drift. Behind closed doors, a more urgent question is being asked: what happens if the transatlantic partnership—the bedrock of European prosperity and security for eight decades—begins to come apart under President Trump's second term?

The answer, according to reported interviews with EU officials, economists and diplomats, is sobering. Europe would lose far more than a trading partner. It would lose the structural advantages that have underwritten its economic model, security architecture and global influence since 1945.

Start with the most visible dependency: commerce. The United States and European Union form the world's largest integrated economic relationship, with annual trade in goods and services exceeding €1.6 trillion—nearly 30% of global trade. American firms account for more than half of all foreign direct investment stock in Europe. European companies employ millions across the U.S.

"People think of this as balanced trade," said a senior EU trade official, speaking on condition of anonymity. "It's not. It's structural integration. Breaking it would be like severing arteries, not cutting ties."

The asymmetry is stark. The U.S. absorbs roughly 20% of EU exports but accounts for less than 10% of American exports. Germany sends nearly one-tenth of everything it produces to the United States. For Ireland, pharmaceuticals and tech exports to America represent the core of its economic model.

President Trump's renewed tariff threats—including proposals for across-the-board duties of up to 25% on European goods—are not hypothetical. European Commission estimates, reviewed by Bloomberg and Reuters, suggest a sustained trade war could reduce EU GDP by up to one percentage point. German industrial output, already pressured by high energy costs and Chinese competition, would face existential stress.

"We're not talking about adjustment," said a German finance ministry adviser. "We're talking about permanent industrial contraction."Retaliation is being prepared, but officials acknowledge it would be pyrrhic. Europe lacks alternative markets of comparable scale and purchasing power. China is not a substitute—it competes with European manufacturing and increasingly restricts market access. Europe’s energy dependence on America is newer—but perhaps more consequential.

Following Russia's invasion of Ukraine, Europe executed the fastest energy transition in modern history, slashing Russian gas imports from 40% of supply to near zero. The United States became the indispensable replacement. American LNG now accounts for nearly half of Europe's liquefied natural gas imports—more than any other single source.

"We escaped one dependency and walked straight into another," an EU energy adviser involved in post-Ukraine planning is quoted as saying "The difference is this one comes with alliance politics attached."

If transatlantic relations sour, Europe's energy security becomes a negotiating chip. Already, Trump administration officials have linked energy exports to European defense spending and trade concessions. European officials worry that future U.S. administrations could weaponize supply in ways Russia never could—through regulatory delays, export licensing or preferential pricing for allies.

Unlike Russian gas, American LNG flows through global markets. But the infrastructure, long-term contracts and political relationships that secure supply all depend on stable U.S.–EU relations."Energy independence was supposed to be strategic," a European central banker has said. "Instead, we've outsourced the risk."Europe's deepest vulnerability lies in defense.

NATO remains the cornerstone of European security, and despite two decades of talk about "strategic autonomy," European military capacity remains profoundly dependent on American power. The U.S. provides the nuclear umbrella, most intelligence capabilities, strategic airlift, missile defense and the bulk of NATO's high-end combat power.

European defense spending has risen since Ukraine, but the increases are marginal relative to need. Collectively, EU members spend roughly €300 billion annually on defense—barely half U.S. levels, spread across 27 fragmented national systems with little interoperability.

"We can't defend the eastern flank without American logistics," said a senior NATO official. "We can't deter Russia without American nuclear weapons. And we can't project power beyond Europe at all."

If Washington's commitment wavers—whether through formal withdrawal from NATO or quiet disengagement—Europe faces a crisis it is structurally unprepared to manage. Rebuilding autonomous military capacity would require not just spending increases, but industrial mobilization, political integration and decades of investment.

Russia, though economically weakened, remains the largest military threat on Europe's periphery. China, increasingly aligned with Moscow, poses challenges Europe cannot counter alone. Without American backing, Europe's geopolitical weight diminishes sharply. Less visible but equally critical: America's role as Europe's primary source of frontier technology, venture capital and corporate dynamism.

U.S. tech giants dominate Europe's digital infrastructure. American venture capital fuels much of Europe's startup ecosystem. The NASDAQ remains the preferred listing destination for European tech firms seeking scale. And American universities produce much of the research that drives European pharmaceutical and aerospace industries.

If transatlantic relations fracture, these flows reverse. European startups would struggle to access American capital markets. Technology transfer—formal and informal—would slow. The brain drain of European talent to Silicon Valley and American research institutions would accelerate, not reverse."Capital doesn't care about solidarity," said a London-based investment adviser. "It goes where it's welcomed and where returns are highest."

Wealth taxes and regulatory uncertainty are already pushing high-net-worth individuals and firms toward jurisdictions offering stability—Dubai, Singapore, Texas. A breakdown in U.S.–EU relations would compound that exodus. Perhaps the most dangerous consequence of Atlantic fracture would be Europe's forced drift toward China.

Europe's trade with China now rivals transatlantic volumes. But unlike U.S. trade—which is broadly complementary—China competes directly with European manufacturing, particularly in automobiles, machinery and green technology. China's record trade surplus and aggressive industrial subsidies undercut European firms at home and abroad.

"If we lose privileged access to U.S. markets, we don't gain leverage with China," said a European Commission economist. "We just become more vulnerable to Beijing's terms."

Europe lacks the market size, fiscal capacity or technological dominance to balance China independently. Alignment with Washington—however imperfect—provides collective weight. Without it, Europe risks becoming a rule-taker in a Sino-American competition it cannot shape.

Against this backdrop, Europe's turn toward wealth taxation looks less like strength than exposure."You tax wealth when you've run out of growth," said a former EU commissioner. "And you need growth to sustain autonomy."

The fiscal pressures driving wealth taxes—aging populations, defense spending, welfare commitments—are real. But the sums raised are modest. Spain's wealth tax generates €2 billion annually. Britain's non-dom abolition may yield £3 billion. These are rounding errors against the scale of Europe's structural challenges.

The real danger is that Europe mistakes revenue measures for strategy—while underestimating how much it still depends on an American partnership that can no longer be taken for granted."Strategic autonomy is a slogan," said a senior European diplomat. "The reality is we're more dependent on America now than we were a decade ago—and less confident it will last."History suggests great powers don't decline from single failures. They decline when fiscal stress, strategic drift and alliance erosion begin to reinforce one another.

Europe today faces precisely that convergence. If transatlantic ties fracture—through trade wars, security disengagement or political estrangement—Europe loses not just a partner, but the structural advantages that have defined its postwar model: market access, energy security, military protection, technological dynamism and geopolitical leverage. The wealth tax debate is loud. The real story is what it signals: a Europe running out of room, at exactly the moment the world demands more. (IPA Service)