How Trump’s presidency could spur migration to Europe

Good morning. EU leaders have welcomed the ceasefire agreed yesterday by Israel and Hamas to halt the 15-month war in Gaza and free the remaining hostages.

And here’s a scoop for you: Top bankers are warning that incoming US president Donald Trump could use his powers to block mergers and acquisitions by foreign companies from countries whose governments don’t align with his policy priorities.

Today, Laura hears how migratory flows could be yet another unforeseen impact on Europe from Trump’s presidency, and our trade correspondent unpacks new research into just how badly Germany’s close trading relationship with China has backfired — and ways to fix that.

Spillover

Donald Trump’s presidency might have some more surprising negative consequences for Europe: His announcement of mass deportations could lead to a surge of migration to the EU, writes Laura Dubois.

Context: Trump has announced a planned crackdown on migration across the US-Mexican border, and vowed to deport millions of undocumented people already in the US.

“This could have consequences, especially for people from South America who then turn to Europe,” said Michael Spindelegger, head of the International Centre for Migration Policy Development (ICMPD), an organisation based in Vienna.

According to a report to be published by the ICMPD next week and seen by the Financial Times, people from Latin American countries already make up an “important share” of overall applications in the EU, as many of them don’t need a visa to enter the bloc.

Last year, some 60,000 Venezuelans and 44,000 Colombians applied for protection in the bloc — both among the top five nationalities for asylum — with many of them coming to Spain.

Spindelegger said that when people from Latin America realised it would become more difficult to reach the US or remain there, applications in Europe could rise further. “In Spain, you can arrive without any visa. And from there, there could be a secondary movement to other countries,” he told the FT.

A spokesperson of the Spanish representation to the EU declined to comment.

Spindelegger predicted that migration would remain high on the EU’s agenda this year, as member states push for harsher measures such as sending rejected asylum seekers to “hubs” outside the bloc to await deportation.

“Return hubs as such, where you bring somebody out of Europe and they are kept there . . . this is not an easy task because you have to find a country [that is willing],” Spindelegger said.

He also pointed to Italy’s scheme to process asylum claims in centres in Albania, which is still on ice. “There are a lot of logistical problems, legal problems with that,” Spindelegger said. “I don’t expect that you can really proceed with a return hub within the next months.”

The European Commission will, however, present new legislation to facilitate returns more broadly, as many people whose asylum claims were unsuccessful remain in the EU. “This is a missing piece,” Spindelegger said.

Chart du jour: Delayed

Almost 40 per cent of trains in Germany are delayed — a result of its ageing railway network. See more charts here about the legacy of Olaf Scholz’s unpopular coalition.

Eastern regrets

German industry once believed China was its saviour — now it looks more like its executioner, according to new research out today, writes Andy Bounds.

Context: Germany confirmed a two-year economic downturn yesterday, with industrial production falling to 10 per cent below its pre-pandemic peak. A few days before that, China clocked a $1tn annual trade surplus.

A report released today concludes the two are connected, as China is increasingly replacing German imports with goods produced by its own automotive, clean technology and aviation industries, which are also taking over other markets in South America and Asia.

“China’s pivot to aggressive export-led growth is undercutting German manufacturing,” says Sander Tordoir of the Centre for European Reform, who co-authored the report with Brad Setser of the Council on Foreign Relations.

Manufacturing still accounts for a fifth of German GDP and 5.5mn quality jobs, Tordoir adds.

The report recommends policies to help Germany weather the shock — though they require help from Brussels. 

Berlin lobbied unsuccessfully against anti-subsidy tariffs on Chinese electric vehicle imports for fear of retaliation on its own car exports to China. But the authors argue that it should back tariffs on even more goods.

The EU should also co-ordinate “buy-European” clauses in national subsidy schemes. And tariff revenues, which go into the EU budget, could help fund a bloc-wide industrial reboot. 

France already favours such moves, so if Berlin decides they are worth pursuing, the push could even help revive the sputtering Franco-German engine that hitherto ran the EU. 

What to watch today

1. Palestinian Prime Minister Mohammad Mustafa meets European Council president António Costa and European parliament president Roberta Metsola in Brussels.

2. European Commission executive vice-president Teresa Ribera speaks about the EU’s Clean Industrial Deal at the Bruegel think-tank, from 13:00.

Now read these