Liberal Europe Podcast I The Transatlantic Rift with Matthew Kaminski

Is Donald Trump’s presidency the beginning of a new era in the global world order? What is there to know about economic disruption and globalization in this context? And is the European Union overreacting in its response to the recent events or rather attempting to ‘make Europe great again’?

Leszek Jazdzewski (Fundacja Liberte!) talks with Matthew Kaminski, POLITICO’s Editor-at-Large, writing regularly on global politics. He is the co-founder of POLITICO Europe, a pan-European publication created in 2014 through a joint-venture with Axel Springer, and a former Editor-in-Chief of POLITICO from 2019-2023. Tune in for their talk!

This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of.

Play the episode on Spotify or SoundCloud, or read the full transcript below.

Hello, welcome back to Liberal Europe. I have a very special guest today, a founder and editor-at-large at Politico E.U, Matthew Kaminski, welcome to Liberal Europe.

So, I want to start with a very, very back picture. Because in the last 80 years, we live in a post-Second World War world, then in a Cold War, post-Cold War. Do you think that with Trump, we are really entering a new era?

And I think that Europeans are reacting to very real things and are finally understanding that there have been shifts in American popular opinion in, clearly, in American government’s view of the transatlantic alliance and of Europe. And there’s always a danger if you refuse to listen to what politicians say, whether that politician is Xi or Putin, or Donald Trump on the campaign trail.

And if Donald Trump repeats over and over again that the Europeans are screwing us, Europe was founded as our enemies, this is a talk track, that has real consequences in practice. I think you’re seeing those consequences in practice in the way this administration in the first few weeks has at least handled the diplomacy of Europe. There’s also a danger in overreacting to these signals.

Presidents change, they can change radically. Elections have big consequences. National interests don’t change that dramatically.

The reasons why the U.S. was so engaged in Europe for the last 80 years are still the reasons why the U.S. should probably stay engaged in Europe going forward. That the tax Americana is a dirty word now for the American right. This is a great setup for American prosperity and defending and a very cheap way to further American economic goals and political goals.

And so I think the thing about Trump is that he’s so loud and the pendulum swings so hard in one direction, I think it actually may, I’m not saying that it will, but you are seeing certainly a pushback from the Europeans as well as domestically in the U.S. And the questions are being asked, how is it in the U.S. interest to pick fights with Canada and Mexico that are so essential to America’s prosperity in terms of supply chain, the biggest trading partners we have. How is it in the U.S. interest to blow up a relationship with Europe? At heart, what did it really mean? It meant that European governments bought U.S. weapons because they thought they were buying an insurance policy with the U.S. That Europeans created this commercial bridge across the Atlantic that is five or ten times bigger than the commercial relationship the U.S. has with China. That Europe was a staging ground for American military might, this ability to project power.

So those things still remain true. I think the danger is in over-reading Trump’s, what he says, and not understanding that the actual doing, that that can still be influenced, it still is not settled. And I think it is in the interests of both the U.S. and Europe to keep a vital transatlantic relationship because it’s much better to be in a post-war era than still in a post-war era because the alternative is to be, frankly, in a pre-war era where you’re breaking up coalitions that have kept Russia and China, authoritarian countries in check, and breaking up systems that undergird our prosperity in the U.S. as well as here.

So I worry about the overreaction, certainly from the Trump people, but also on this side. The last thing I’ll say on this is that it’s interesting. I was in Brussels and Paris recently, and I do think the French and the British are hearing from Trump privately that he doesn’t want to pull the U.S. out of Europe and that there is an opening there to work with them.

Is it easy? No. Are they obnoxious? Yes. J.D. Vance is, you know, imagine if a European leader went to the U.S. and gave some major speech where you insult, you know, 360 million Americans.

But it’s still in the U.S. interest and in the European interest to stick together. But the trust is definitely broken, certainly severely hurt. And in the U.S., I don’t think Trump—it’s hard to define like a grander strategy here.

They say there is, but it seems more of a continuation of a certain kind of campaign rhetoric being put into practice. But I think you are seeing some pushback there too.

I think what’s interesting with the first Trump presidency is the sort of difference of reaction, because before everyone thought, OK, he’s contained, adults in the room, there is establishment amongst him. Now he seems to have much more room for maneuver. And also it seems to be much less sort of pushback, ideological, and it seems almost like Trump is waving a larger wave, larger than himself. I wonder to what extent do you think it might be the case of changing U.S. approach, not as administration, but as a country, as a nation, towards globalization? Because it almost seems like a revisionist power towards globalization right now, which would be, as you mentioned, an extreme success story of the U.S. Do you think—because in Europe people see the East Coast, New York, Washington.

Do you think we missed something? Do you think that maybe a lot of voters realize that, OK, this bill is bad for us, because this is what Trump is projecting to the world?

Yeah, no, I think you’re absolutely right. I think we are missing something, and it’s linked. And this is a phenomenon that is happening, I think, on the American right or on the coalition that Trump has both created and energized.

And that is driven by two things, global economics, sort of a global economy the way it’s been created in the last eight years, is bad for working Americans by letting in immigrants that take your jobs, by importing goods that you should be producing here in the U.S., by leaving a lot of, you know, middle America feeling that it’s been screwed by someone, always easier to blame someone else than yourself. And the second part of this is very related, that the Iraq War and the post-9-11 Bush presidency on the left, this is actually—that was what galvanized the left early on, mostly forgotten, not an issue. But somehow, with this very strange delay, has become an issue for the American right.

You know, when Trump says, I am the president of peace, he’s doing actually what Barack Obama did in 2008 by being against the Iraq War. He’s saying, I am not going to bring that poor kid from Ohio, the small town in Ohio, to fight wars on behalf of a globalist elite that serves the interests of some, you know, deep state and foreigners. And I’m going to just defend what’s good for America.

It’s pretty simple populism, but it also is the hangover from the global financial crisis of 2009 and 2010, and the continuing degradation of the manufacturing economy for plenty of good reasons. And it’s the hangover from an overextension of American military power to completely different parts of the world than Europe. And that is a core.

The thing is, that’s not half the country. It’s still not the majority. That’s about 30 to 25 percent, and that’s the hardcore MAGA constituency.

But Trump, like a lot of presidents, like Biden actually, Biden came into the office. Did he move to the center? No, he actually moved to the left where he thought the party’s heart was. Trump is where the current Republican Party heart is.

But the party’s brain and his brain should be much more in the center, because what he is doing right now, it’s remarkable to see how fast it’s happening. We thought we were heading for, you know, animal spirits being released, American economy doing great. We’re talking about a recession.

The stock market’s down 10 points in just—this is the worst performing stock market for the beginning of a presidency, since, I mean, certainly in the century. The confidence, consumer confidence, down. Confidence of CEOs, down.

Inflation, up. Or at least soon to be heading up with the tariffs coming in place. So, yeah, so there’s definitely something happening in American—with the American popular opinion.

But, look, if you look at the surveys, people hate Vladimir Putin, big majorities, including in the Republican Party, who do think America should be a leader in the world. So I wouldn’t over—again, overreaction to Trump’s high noise levels, that can also be dangerous for the outside world. America didn’t suddenly wake up and become a wholly different country than it was on January 19th, on January 20th, when Trump came into office.

Right. I think it’s a fair warning to the Europeans. I want to link to what you wrote at the very beginning of the Trump presidency.

It was January 1st. You wrote that, well, this year will be judged by more than anything, by the way, that Trump interacts with this changed world. I think it has been proven true.

We’re not talking anything else than Trump. You also wrote, and it also has been proven true so far, that Trump and Musk are claiming they will disrupt our politics and governments, but also commerce, culture. And I wonder, what is the noise here, and what is the real disruption here? Do you think that they are really disrupting something, or so far they seem to be disrupting themselves and their own politics and economy? Do you think they are really making an impact on the world, or do you think it’s just an exaggeration and claim on Trump’s treatment?

I mean, they’re definitely disrupting the world order. And again, that’s obvious. Are they doing it in a way that, if they were put on truth serum, would they say that they’re doing it, that the effects are what they hope to see happen? I think on truth serum they would say, huh, there’s some unintended consequences here that we didn’t quite expect. I think it’s worth going through them.

They certainly did not expect to have the stock market, and tariffs is a big part of it, but so is Elon Musk going into the U.S. government and starting to just break a bunch of things. It’s one thing to reform the U.S. government, fine. Everyone thinks we should get slimmer. You have to kind of look hard. Great, if you’re a CEO, yes, deregulate some agencies, shut them down, fine. But the way it’s been done, and without seemingly a plan, that has spooked the markets and spooked American business.

And remember the line about business of America is business? That is very true. It’s a very pragmatic country. It’s a country that is built around making money, and people are not making money right now.

The other thing that’s happened, which I think is unexpected for them, is I do think that that MAGA world does believe that America is in decline. I think J.D. Vance truly does believe this. Therefore, we’ve got to rein it back in, and protect our space planet.

That means that Putin has his way, part of Europe, so be it, China, so be it. But what he’s doing, he’s actually there accelerating the potential for American decline by questioning whether the world should be paying for American deficits, whether the dollar still remains the safe currency and the fiat currency. That cannot be intended.

And the other, this is where it’s debatable if it’s intended or not, but he’s saved Vladimir Putin. Vladimir Putin was not doing very well in early January. Inflation was high. Interest rates were super high in Russia. He lost thousands of tanks, tens of thousands of people in this war, and he talked to people at NATO, like, well, he can’t continue for another year. He’s given him a get-out-of-jail-free card as well.

And then internally, I don’t see Trump as, I don’t see Musk, I mean, never mind that the Musks, you know, Teslas are going to the floor, I mean, the sales are collapsing in Europe. People hate the product. Their share price has been halved.

So I think Musk has lost in personal net worth about $170 billion since the start of this administration. Don’t cry. He still has $300 billion. But that is not, I don’t, again, that is not the way they were hoping this would play out. I know they were hoping this would play out. Yes, we want to show things are changing and we’re not going to be slow, but I think that you mentioned Trump 1 versus Trump 2. It’s really important to remember Trump 1, the pragmatic, he was as noisy and said his crazy things, but he was quite pragmatic and quite risk-averse. And that seems to be not the case, at least for now, on some really important things. But it doesn’t mean that that’s not there. And the beauty of Donald Trump, in a way, is that he can say A) today and say B) tomorrow without any sort of apology.

And so he is known to sort of change his mind very, very quickly. And this is why it is so important for not just the formal checks on his power from Congress, from the courts, from the media even, but the informal ones from business, from the allies, to engage and try and steer in another direction. Because he’s not getting that directly from his cabinet right now, nor even from his supporters. But even he, one thinks, realizes that the world is a lot bigger and more complicated.

You also wrote, and I quite agree, that the best way to respond to the autocrats is this American strength. And I’m wondering whether this administration is really projecting strength.

Because it seems they’re really not projecting strength.

And that is the question of China. One of the few things where you have consensus in the U.S., which is strangely sort of missing from this administration, actually. Do you think it should change the approach towards China and autocrats in general? What’s happening here? What would be the U.S. strategy under Trump? He seems to actually admire these autocratic leaders.

Yes, he does admire the autocratic leaders. I think he’s stylistically, he admires them aesthetically. That’s a style he wants, he sort of feels comfortable with. I think he also respects power and thinks of the U.S. as a big country that should be striking deals with little countries. Europe, a bunch of little countries.

Ukraine, a little country. Imagine him treating Putin in the Oval Office the way he treated Zelensky. Impossible to imagine.

But if you’re talking about rejecting American power, this is the crazy thing about this moment, right? As of 53 days ago, the U.S. was by far the strongest economy on the planet. Great growth prospects, inflation under control, military unmatched. He had all the cards, to use his phrase, with Zelensky in his hand.

If you were a Chinese super agent or someone at the KGB or a crazy left-wing radical in France or even the U.S., and you were to design a plan to undermine American power in four weeks, you could not do better than what he’s done here. On every single pillar, what is the pillar of American strength? It’s economy, undermine. The fact that the dollar is the fiat currency and the fact that the world pays our debts, also undermine. Trade, which keeps America prosperous, boom. Immigration, our ability to kind of bring in the best people in the world to work in the U.S., boom. Oh, by the way, coming to our universities, the other pillar of American power, also went after that, boom. By the way, rule of law, most important thing going back centuries of why the U.S. has been so prosperous. That is now in question. Now, you could say this is apocalyptic, and there’s some people who actually think that maybe the next move for Trump is to invoke martial law because he doesn’t agree with the courts.

I think I want to say it’s more that Herbert Stein quote that if something doesn’t seem like it can continue going this way, it’ll stop. So this seems unsustainable as a package from the point of view of the vast majority of Americans. The stock market is only down 10%, not 25%.

His approval rating has flipped from above 50 to being 45% now, and we’re heading down. But he’s not at 30 yet. So I’m not sure we’ve reached the peak Trump, but this does not seem like a sustainable outcome for him.

But again, he does also seem like he’s convinced that he’s doing the right thing. And if that’s the case, then we’re in for a pretty tough few months and probably years.

The last question before I let you go. We’re at the World’s Third European Conversation. A big part of the conversation is the Europe response to Trump, especially in the digital and economic world. It’s almost impossible technologically to disentangle Europe from the U.S. What do you think Europeans should do now? Except, of course, not overreacting.

I think the Europeans have actually, you know, Trump is kind of helping make Europe great again, right? By kicking you in where it hurts. And hopefully it doesn’t mean that Europe is going to become Russian again, which is the real danger of this. But I think that the fact that you have core of Europe, that it’s woken up core Europe, meaning Germany, France, and the UK.

This has saved Keir Starmer’s premiership, you know, the fact that we can deal with Trump. Macron has a new lease on life. Also, the French feel really good.

We’ve been telling you for decades and decades you cannot trust the Americans. And the Germans are, if you’re Polish, you’re like, I want the Germans to be stronger, but maybe not too excited about rearming. But they have to be rearmed and they have to take on a leadership role.

I do think Europe should also look, it’s also shown where Europe does have strengths. Because as much as I think it can be overdone that America is having a complete psychotic meltdown, which frankly does seem to that many days. The European narrative of decline is also overdone.

You know, Europe has incredible manufacturing talent. It’s got incredible human capital. It’s got amazing civil universities. It’s got some huge problems. But look at this country where we’re in. Poland is going to pass Japan in terms of GDP per capita and PPP terms within three years.That’s crazy to think about. You’ve had 30 plus years of uninterrupted growth, which has transformed this place. You’re spending 5% of your GDP on defense. You know, this is a real serious player in this part of the world. Finland, the Nordics, Romania, I don’t know. But you know, there’s a lot of, and now you have core Europe coming together.

And I think if the message from the U.S. is Europe has to take care of its own backyard market, fine. Embrace it and go forward with it. I think it’s still ultimately America is a European power. And again, it was only three weeks ago when we were truly a transatlantic, you know, most important ally by far. But I think the Europeans rearm, should seriously think about, say, I think Ukraine is a test case for Trump, which he may fail. But we’ll see.

People around him say, no, no, he doesn’t want to sell it out to Russia. But for the Europeans, too. You know, there is no reason why Europe, which has 10 times the size of the economy of Russia.

Russia is a basket case. It’s like John McCain, it’s a third world country with a gas station and some nuclear weapons. We just have nuclear weapons here. In Europe, this is a moment to be serious. But it’s not a moment to become hysterical, including about the U.S. I really, you know, NATO is a fantastically successful military alliance.

The post-war architecture, because it was created out of such horror, is actually incredibly strong and still wise. This is not the post-World War I architecture. This is post-World War II.

It’s like the U.S. Constitution. It’s been around since the 1780s, and it’s still pretty damn good. So I think just because America seems like it’s self-destructive, you shouldn’t be self-destructive here, I’d argue.

And Europe should really, you know, feel so good about the way that it’s come together in response to this. But the danger for Europe is, for me, obvious. One, that the European individual countries are going to start to try and do their own deals with Washington.

Or that, once again, Europe kind of loses its focus. Or that the same political forces you’ve seen in the U.S. Which, by the way, you saw in Europe first with Orban in Hungary, with Le Pen in France, will be allowed to win power. And even as you’re thinking about the defense issue, I do think migration has to be thought about seriously.

And I do think that Europe should also use this moment to deregulate and do to Europe what Poland did to itself 30 years ago. Kind of open up, liberalize, and that will lead to a lot better things. Because the human capital is here, it’s just the rules.

The Transatlantic Rift with Matthew Kaminski

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