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The twin political transitions underway in Washington and across Europe mark a pivotal moment for global commerce. Both the United States and the European Union are emerging from electoral cycles that have reshaped domestic priorities and redrawn the lines of economic diplomacy. The implications extend far beyond national borders. The next phase of transatlantic policymaking will redefine supply chains, trade patterns, regulatory landscapes, and the expectations placed on global business leaders.
For corporate affairs executives, this new order demands more than vigilance – it requires active adaptation. As governments recalibrate the rules of the global economy, the ability to anticipate and engage with shifting policy regimes will determine who gains advantage and who is caught flat-footed.
The Trump Administration: economic confrontation
The new U.S. administration has put a premium on reindustrialization, competitiveness, growth, and at times, retaliation. Its early policy architecture points to an era of economic confrontation – a three-legged stool that combines aggressive use of (and threats of use of) tariffs, deregulation, and muscular state intervention.
1. Trade and tariffs for strategic competition
Trade policy is once again an instrument of change. The Trump Administration is expected to maintain a “selective openness” posture: lowering barriers for some partners while tightening restrictions on strategic rivals (and periodically, on allies, too). Tariff relief for allies in Europe and Asia may come with conditions tied to purchase and investment commitments, market-opening commitments, and enforceable reciprocity measures. Simultaneously, outbound investment screening and export controls on advanced technologies – from semiconductors to quantum computing – are set to expand. For multinationals, the message is clear: trade flows are being filtered through a new lens and could be altered with little notice.
2. Deregulation
In support of its industrial policy, the White House is also pursuing deregulation in targeted areas. Top of the list are energy infrastructure and permitting, but deregulation is also a major component of the Administration’s plans for financial innovation. For example, the Administration has directed agencies to adopt a “10-for-1” rule whereby each new regulation must be accompanied by the repeal of at least ten existing rules and requires that net regulatory costs for fiscal 2025 be significantly less than zero. On the energy front, regulators are accelerating approvals for fossil-fuel and LNG export infrastructure and revisiting long-standing nuclear and transmission permitting rules in favor of an “energy-abundance” agenda. In the financial arena, the Administration has signed an executive order under which employers and plan sponsors will be encouraged to give 401(k) participants access to alternative assets – such as private equity, real estate, venture capital and cryptocurrencies – through defined-contribution retirement plans.
3. State intervention
The Trump Administration has embraced a muscular form of state intervention. Beyond tariffs and targeted tax incentives, the White House has also directly decided ownership transitions, negotiated export license fees, and used taxpayer dollars to invest in private companies that are not at risk of failing. The result is a more nationalized capitalism – one that requires global business leaders to consider how best to plan for and mitigate potential demands.
Europe in a fragmented world: industrial strength and economic security
Europe enters this new political phase with a greater awareness of industrial risks and the need to protect competitiveness and economic stability. Consolidating existing measures, adapting them to economic realities, and strengthening Europe’s industrial capacity in a more conflict-ridden world are, after the 2024 elections, the clear priorities of the von der Leyen II Commission.
The new Commission maintains the long-term objectives but adopts a different approach: less regulatory expansion, more economic stability, increased focus on the impact on businesses, and a much more assertive stance towards the outside world. In this context, competitiveness becomes the balance point between political goals and industrial needs.
1. Competitiveness as a strategic pillar
The EU is thus entering a phase of “pragmatic consolidation,” where fewer new rules and increased focus on the implementation and economic sustainability of ongoing transitions will be prioritised. Attention will shift towards enhancing production capacity in key sectors such as energy, semiconductors, clean technologies, and defence. This will also involve a more targeted use of European financial instruments, as well as . All this will involve reviewing objectives and timelines to ensure that the climate transition does not undermine industry and employment.
All of this will pursue a clear objective: to preserve Europe’s industrial base within a much more competitive global context.
2. Trade: geopolitical diversification, not just market opening
Reducing critical dependencies, developing new geopolitical options, and making value chains less vulnerable to transatlantic and Sino-European shocks. This reflects the guiding principle behind the transformation of the Union’s trade policy, which aims to combat strong competition from China and the United States.
There are many examples. From the agreements with Mercosur, Mexico, and Chile, which reopen a strategic area after years of stalemate; to the CEPA with Indonesia, which enhances access to critical raw materials and Europe’s presence in the Indo-Pacific; and to the negotiations with India, which have become a geopolitical priority and represent the largest agreement in the world, involving 1.85 billion consumers. Additionally, there is Australia, whose deal is part of a broader framework of cooperation on defence and sensitive technologies.
3. Climate and industrial policies: continuity in objectives, change in means
There is a shift in pace and tools, without abandoning the green transition, focusing on priorities such as: procedural simplification and greater coherence between legislative acts; safeguarding industrial supply chains most affected by transition costs; and energy security as a prerequisite for competitiveness.
This also applies to digital policy, where Brussels now aims to make the regulatory environment more predictable by reducing overlaps and stabilising a framework that in recent years has been seen by businesses as excessively fragmented.
What this means for global businesses
The interplay between Washington’s industrial policy and Europe’s regulatory assertiveness is producing both friction and opportunity. For multinational enterprises, the challenge is to stay agile amid competing expectations from two powerful jurisdictions.
A fragmenting global market
Trade alignment between the U.S. and EU will be uneven. While both sides share concerns about China’s economic practices, they diverge on approaches to digital taxation, subsidies, and green trade. Companies operating across the Atlantic must prepare for a patchwork of standards – and, increasingly, for the possibility of “policy overhang,” where compliance in one market complicates access to another.
Corporate diplomacy as strategy
In this environment, corporate affairs leaders become de facto diplomats with in-country expertise. Their remit extends beyond lobbying to bridge-building – interpreting policy signals, framing corporate contributions in terms that resonate with local priorities, and managing perception risk. The most effective teams are already retooling: building geopolitical scenario models, embedding government relations into business units, and equipping executives to act as credible envoys.
A practical imperative follows: engagement must begin before the crisis. Whether on trade rules, AI governance, or climate adaptation, the companies shaping policy outcomes are those providing actionable insights rather than reactive requests. So, instead of asking, What do we need policymakers to do? companies should be asking themselves, What can we teach policymakers about?
Balancing corporate nationality and global reach
The new era also redefines what it means to be a “global company.” Governments increasingly expect firms to serve as instruments of national policy – supporting domestic employees, securing supply chains, and advancing national competitiveness. Multinationals cannot afford to appear as political proxies, but they must also demonstrate a sufficient amount of domestic pragmatism. The strategic skill lies in demonstrating alignment with national goals without surrendering operational neutrality. This balancing act will test the judgment of corporate affairs chiefs worldwide.
From risk to advantage
The post-election reordering will not be short-lived. It represents a structural realignment in how advanced economies define prosperity and power. Within the turbulence lies opportunity, however. Corporate affairs teams that once saw themselves as advocates must evolve into intelligence hubs and integrators of strategy. They must map geopolitical exposure, quantify value at stake, and link policy shifts to business outcomes. Above all, they must help their organizations act not as observers of change but as participants shaping it.
In this new transatlantic order, influence flows to those who engage early, speak credibly, and align purpose with policy. The rules of globalization are being rewritten – but so too are the rules of corporate leadership.