The “Prisoners Dilemma” – emotions versus reason

The USA - economically overpowering, militarily indispensable, and morally... well, wavering - confronts us with an unpleasant question:

Friend or economic foe?

The Trump administration is using tariffs as if they were poker chips. For European companies that have long been established in the US market with brands, sales and subsidiaries, this comes as a blow to well-established supply chains.

The aim: to relocate production capacities to the USA. And lo and behold - German plants in the south of the USA (VW Chattanooga, TN, BMW Spartanburg, SC, Mercedes Vance, AL) are already waiting in the wings, ready to expand. Nice coincidence, or rather a German-American strategy? 

The effect: investments are migrating - out of the EU and into the USA.

The deficit in the manufacturing sector is almost160 billion euros - and yes, that looks like a pretty unfavorable negotiating position.

Welcome to the dilemma.

The good old "Prisoners Dilemma" (now on a global scale)

Two suspects, no evidence, an offer from the police - you know the drill. You confess, but your buddy doesn't? Jackpot. Do you both confess? Well, half bad luck then. Will you both keep quiet? At least you'll only get a slap.

And here's the trick:acting rationallycollectively leads to a less favorable outcome. Welcome to the wondrous world ofgame theory, wheretrust would be useful, but is unfortunately rarely invited.

What now? The EU between theory and reality

In the 1980s, Robert Axelrod organized a prisoner's dilemma tournament with computers. The result? The most successful strategy was "Tit for Tat": first be nice, then act like the other person.Cooperation with the potential for revenge - charming.

So what to do with Trump, the new player in our economic policy simulation game?

Strategy:

2. Cooperative first round - e.g. lower import tariffs on US cars, ease registration restrictions.
3. Second round? If no reaction:mirror consistently. Revenge, baby.

Revenge, but with style

The EU must learn to act with realism - not with do-gooder pathos.

1. Define goals: What do we want to achieve - with the means wereally have ?

2. Evaluate reactions: Will our response lead to escalation? And what then

3. Recognizing technology dependency: 109 billion euro deficit in digital service trade - powered by Google, Amazon & Co.

Yes, Europe has voluntarily enslaved itself digitally. And no, there is no "Like" button.

Possible consequence:mirror tariffs, identical to the US side. No drama, just balance.

The EU as ONE player - not a debating club

The most important thing: the EU must act as one. If national egos prevail, Washington will treat us like a patchwork quilt. Or even worse: like Great Britain.

The Trump administration is testing our reactions. Every tariff, every provocation asks: "What does Europe actually dare to do?"

Emotions play a role in this game - not to show them, but to recognize, use and counter them.

Trump loves nostalgic car worker fantasies? Fine. Then let's give him the feeling, but not the advantage.

Because in the end, it's not the one with the biggest headlines who wins. It's the one who plays smart - and quietly writes the rules.