Trump win poses existential threat to Europe, says Blackrock chief
‘This is perhaps also a wake-up call. I see it as an opportunity for the construction of Europe’
DONALD TRUMP’S re-election poses an existential threat to Europe, according to the leader of the world’s largest asset manager.
Philipp Hildebrand, vice chairman at Blackrock, said the re-election of the former US president “would challenge Europe fundamentally” following a decades-long dependence on America for leadership on the world stage.
Mr Hildebrand, who has served in the position since 2012, was responding to comments last week from Christine Lagarde, the head of the European Central Bank (ECB), who said Mr Trump posed a “clear threat” to Europe because of his divergent views on climate change and trade policy.
Mr Trump solidified his position this week as the Republican presidential frontrunner after winning the Iowa caucuses in a landslide victory.
Analysts now believe a run-off between Mr Trump and President Joe Biden is the most likely scenario this November, presenting a rerun of the 2020 vote.
Ms Lagarde last week warned that history showed Mr Trump’s “manner in which he carried out the first four years of his mandate is clearly a threat”.
Asked if Mr Hildebrand agreed with this sentiment, he said: “Christine speaks for herself. I think the flip side of it is that this is perhaps also a wake-up call for Europe.”
He said EU leaders must decide whether “to be a kind of independent sovereign” or accept a “world where we have great dependencies, whether on China or on the US”.
Speaking on the sidelines of the World Economic Forum in Davos, Mr Hildebrand urged Europe to seize the opportunity to transform itself into a technological superpower that was less dependent on America.
He added that Europe’s capabilities on defence were “just not there” and required a rethink. Mr Hildebrand said: “I see it as an opportunity for the construction of Europe.” He added:
“Clearly, if [Trump’s election] were to lead to a rupture, which I think is what President Lagarde has in mind as a risk, then that would challenge Europe fundamentally.”
Mr Hildebrand helps to oversee more than $9trillion (£7trillion) of assets at investment giant Blackrock, which is the largest money manager in the world. His comments came as his colleague Thomas Donilon, the chairman of Blackrock Investment Institute (BII), said the outcome of the US election would lead to starkly different realities for investors.
He said: “You couldn’t really have two more different approaches to government and the approach to the presidency than President Trump and President Biden.
“The issues which are significant to investors include trade and taxes and regulation and climate and international relations generally. So that for us [and] for the world is an important event in 2024 in a year of elections.”
Climate policy represents just one example of where President Biden and Mr Trump fundamentally differ. President
Biden has introduced a huge programme of subsidies and tax breaks for green energy under his $369bn Inflation Reduction Act. Mr Trump, meanwhile, plans to gut the Act if elected and instead ramp up production of fossil fuels, senior campaign officials told the Financial Times last year.
Mr Donilon, who served as Barack Obama’s national security adviser, said geopolitical fragmentation was now the new normal, which had big ramifications for trade and the global economy going forward. Contrasting the current geopolitical landscape with the financial crisis, Mr Donilon said world leaders today were far less likely to collaborate on solutions to crises.