No matter the outcome of the U.S. election, Europe is readying for a 'America First' approach.

• A senior European diplomat, who wished to remain anonymous due to the delicate transatlantic relationship, told CNBC that the winner of the upcoming election would prioritize "America first."
• Trade with the United States is extremely important for European nations.
• In 2021, the bilateral trade and investment relationship between the EU and the U.S. reached an all-time high of 1.2 trillion euros ($1.29 trillion), making it the largest such relationship globally.

Despite the upcoming White House leadership change, European politicians and policymakers are already gearing up for increased American protectionism.

In the final days of the presidential race, Vice President Kamala Harris and former President Donald Trump are evenly matched, with polls showing them tied in crucial swing states and nationwide.

A senior European diplomat, who wished to remain anonymous due to the delicate transatlantic relationship, stated to CNBC last week that the winner of the upcoming election would prioritize 'America first'.

The senior diplomat, who participates in confidential talks among EU leaders, stated that the main concern for Americans is the economy and the solution will require more economic nationalism, although he disagrees with it.

German Finance Minister Christian Lindner warned on Friday that there could be retaliation if the U.S. initiated a trade war with the European Union.

To avoid a trade conflict with the European Union, diplomatic efforts are necessary to convince whoever enters the White House that it is not in the best interest of the U.S., as stated at the IMF annual meetings in Washington, D.C.

The trade relationship between the EU and the U.S. is of utmost importance to European nations, as they have the largest bilateral trade and investment partnership globally, with a record high of 1.2 trillion euros ($1.29 trillion) in 2021, according to the European Commission.

Harris is viewed as possibly continuing Biden's economic policies, which will be associated with the Inflation Reduction Act in Europe. This $369 billion US legislation aims at climate and energy policies. However, the IRA has caused controversy among European leaders due to its perceived protectionist nature.

The "America first" policy is likely to have more repercussions for European economies under a Republican presidency. Trump has threatened to impose additional across-the-board tariffs of 10% on European products, which could put a strain on the bloc's exporters and, according to data from Goldman Sachs, weaken the euro by as much as 10%.

The former president's style and confrontational tone were met with dislike from some European leaders during his first tenure at the White House. The two sides frequently had differing views on trade, defense, and technology, among other issues.

The anonymous senior diplomat stated to CNBC that we are no longer surprised by Trump's actions, as we have previously dealt with him and know how to handle it.

Another EU official, who wished to remain anonymous due to the delicate U.S. ties, informed CNBC: "We're not panicking. We're taking a practical approach, but we must prepare for both possibilities."

The European Commission is working on "bold" initiatives regardless of who becomes the next president.

In May 2023, CNBC reported that European officials were quietly preparing for the possibility of a return of Trump. This meant a focus on reducing dependencies with the U.S. and with China, something that EU leaders continue to prioritize.

The 27 heads of state of the EU issued a statement in October, advocating for "greater efforts to boost the Union's competitiveness, fortify its economic resilience, revitalize its industries, and fully harness the potential of the Single Market."

The urgency of taking effective action is emphasized by the statement.

Champagne to celebrate?

The U.S. presidency is a subject of division among the various EU capitals, with national leaders expressing differing opinions about the possibility of a second Trump presidency.

In Brussels this month, Hungary's Prime Minister Viktor Orban reportedly said he would celebrate Trump's return to the White House by opening "several bottles of Champagne." EU leaders are expected to meet in Budapest two days after the U.S. election and discuss the outcome over dinner.

An unnamed EU official, who will be attending meetings in Budapest, stated to CNBC that they will not celebrate if Trump wins the election. The official also expressed their concern about the outcome, stating that the U.S. election is "very worrying" as it "comes down to 200 votes in [swing state] Pennsylvania."

The official stated that, regardless of the outcome, it will not be as surprising as it was previously, and Europe has since enhanced its strategic autonomy and defense expenditure.