The fate of the European economy

Europe's economic news agenda is dominated by the urgent question of what the continent's reaction should be to protectionary measures heralded by the incoming US administration. Should the European Union become embroiled in a tariff race that could disrupt global trade flows, and how should it position itself between China and Western economies?

If a broader shift toward protectionism and away from free trade does take place, how will it impact the dynamics between highly export-oriented EU countries like Germany and those more concerned by the cost of imports? Additionally, how might the structure of production be affected, particularly for goods versus services, where the United States holds a dominant position and is less vulnerable to protectionist measures?

There are many who believe that the significant challenges brought to light by the present circumstances...