Pip: Welcome to osoparavos.com, where the Atlantic Ocean turns out to be significantly less of a buffer than anyone hoped.
Mara: Today we’re working through a piece by Adam Donaldson Powell that maps the real-world consequences of Trump’s economic and political agenda — for Europe, for Britain, and for Americans who live and pay taxes somewhere else entirely.
Pip: Let’s start with the tariffs, the NATO bills, and the tax returns that follow you across borders.
Trump’s Reach Across the Atlantic
Mara: The framing here is that Trump’s return has changed the economic environment for three distinct groups simultaneously — European governments and businesses, British exporters, and American citizens living abroad — and the mechanisms connecting those groups are tariffs, defence obligations, and a U.S. tax code that doesn’t care where you sleep.
Pip: The post puts the trade dimension plainly. Setting up the tariff logic directly: “tariffs can function both as economic barriers and as bargaining tools.”
Mara: That distinction matters in practice. The UK negotiated a deal that cut U.S. tariffs on the first hundred thousand British cars exported each quarter from twenty-seven-and-a-half percent down to ten percent. A zero-tariff arrangement for pharmaceutical exports to the United States was also reported by 2026. So the barrier became a lever.
Pip: Though the lever came after British goods exports to the U.S. — excluding precious metals — fell by one-point-five billion pounds, or nearly twenty-five percent, in April 2025 alone. The deal followed the damage.
Mara: The EU faced the same dynamic at larger scale. The framework reached in 2025 set a general fifteen percent U.S. tariff on EU-origin goods, while the EU agreed to eliminate tariffs on U.S. industrial goods and open preferential access for American agricultural and seafood products. EU-U.S. trade in goods and services reached one-point-eight trillion euros that year.
Pip: Fifteen percent on thin-margin industries like machinery and chemicals isn’t a rounding error — it’s a relocation incentive.
Mara: Exactly the point the post makes. European companies may respond by building production inside the United States to avoid the barrier entirely, which redirects capital that might otherwise have stayed in Europe. Defence spending adds another layer: NATO members agreed at The Hague summit to a long-term target of five percent of GDP annually by 2035, and European allies increased defence expenditure by nearly twenty percent in real terms in 2025.
Pip: More money to defence, less available for everything else — unless governments borrow, tax, or cut. That’s not a hypothetical budget squeeze, it’s an active one.
Mara: And then there’s the dimension that gets the least public attention. The IRS confirms that U.S. citizens and resident aliens living abroad remain subject to U.S. tax on worldwide income. An American earning euros in Oslo or Paris still files a U.S. return, still reports foreign accounts above ten thousand dollars, and still navigates what the Taxpayer Advocate Service describes as a substantial compliance burden.
Pip: The post is careful to note this isn’t always an extra tax bill — foreign tax credits and exclusions reduce or eliminate double taxation in many cases. The cost is the compliance: accountants, forms, and the standing risk of penalties for paperwork errors.
Mara: The 2025 One Big Beautiful Bill Act changed deductions and other provisions affecting individual taxpayers, and its effects on Americans abroad vary sharply by circumstance — a salaried employee in London faces a different situation from a retiree drawing Social Security or an entrepreneur running a European business.
Pip: So “does this help or hurt Americans abroad” is genuinely the wrong question. The right question is which Americans, doing what, where.
Mara: The post closes on a structural point: the transatlantic relationship is becoming more transactional. Lower barriers, expanding globalization, and the assumption that integration was broadly good — those were the operating assumptions for decades. Reciprocity, domestic production targets, and defence burden-sharing are the operating assumptions now.
Pip: Which means the rules that businesses, investors, and individuals built their plans around are less predictable than they were — and that’s a cost even before a single tariff is paid.
Mara: The post’s conclusion is measured: this is adjustment, not rupture. Trade agreements can reduce tariffs, companies can adapt, individuals can use tax treaties. But the decisions made over the next several years will determine how much of that adjustment becomes permanent restructuring.
Pip: So — more transactional, less predictable, and your tax return still finds you in Oslo.
Mara: The thread running through all of it is that geography no longer insulates anyone from Washington’s policy choices — governments, companies, or individuals.
Pip: More on that next time.
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