Europe is concerned about how Donald Trump will act and how to maintain trusted alliances, said former President Kersti Kaljulaid. While, in her view, there is no reason for great optimism, there is no need to sulk either.

"The most important thing is to act, to find ways to reach out and to communicate with Trump in a way that he understands. We were able to find such approaches during his first term as president, including in Estonia. I believe we still possess that capability today. This is also true for Poland and other countries in Eastern Europe," Kaljulaid stated.

According to Kaljulaid, based on Trump's previous term, more intensive interactions with Europe can be expected compared to the current U.S. president Joe Biden's term.

"I think one major reason why there is a touch of optimism is that if the extremely cautious, Biden-like approach had continued – and it seems to me that Biden had a Kissingeresque view – he didn't actually care as much about this region. I believe that now there is a sort of turning point, a window of opportunity. It could go very wrong, but it could also turn out significantly better than we might fear today, just as it did during Trump's previous term," Kaljulaid explained.

However, the key topic in the U.S. presidential election was the economy. High tariffs on European and Chinese goods and lower taxes for U.S. companies are likely to characterize Donald Trump's economic policies. This probably won't bring much benefit to Estonia.

"In terms of economic policy, I find it difficult to see how these decisions would benefit Estonia or Europe. On the contrary, they would likely worsen our competitive position, making life even harder for European companies already struggling on the international market," noted Mihkel Nestor, SEB economic analyst.

Trump has mentioned imposing 60-percent tariffs on China and 20-percent tariffs on Europe. At the same time, the U.S. is the European Union's main trading partner, with around 20 percent of exports heading across the Atlantic last year.

Although the U.S. market is not of direct critical importance to Estonia, the impact of tariffs would still be felt.

"For example, take Finland, our largest export destination. Last year, the United States was its main trading partner. The situation is relatively similar for Sweden and Germany. So, if export opportunities for Swedish, Finnish and German exporters deteriorate in the U.S., this will indirectly affect us as well," Nestor explained.

Beyond economic issues, there are also questions about security during Trump's term in office. According to Kaljulaid, Europe has already spent the past year preparing for the possibility of Trump's return, given the ongoing war in Ukraine.

"I believe that some of the steps taken by Europe's defense industry toward development have been influenced by the thought that things could unfold as they have now. I think today many are gathering to discuss how to further accelerate Europe's defense independence," said Kaljulaid.

Given the global security situation, it is clear that European countries must contribute more to NATO. Researcher Helga Kalm said that observing Russia's investment in its defense industry gives a strong sense that NATO countries should increase their contributions beyond the 2 percent of GDP benchmark.

"There is a growing sentiment that we should increase contributions as NATO members to 2.5 percent or even 3 percent, which would be very challenging, especially for countries that are not even meeting the current 2-percent goal. The question is, which countries are not contributing enough? Examples include Canada, Italy, Spain and other Southern European countries. How Trump will react to this or how it will unfold remains to be seen," Kalm said.

Kalm noted that although Trump did not emphasize Ukraine during his campaign and has indicated he might focus less on Ukraine during his term, this may not necessarily be a negative outcome.

"I feel that if this became a contentious topic in inter-party discussions, it could be worse for Ukraine. If it remains a matter of everyday work, experts who are heavily invested can handle it effectively. Just because the issue isn't publicly highlighted doesn't inherently mean a bad outcome," Kalm explained.

Could Trump, however, push for peace in Ukraine, forcing the country to relinquish some of its territory?

"If we look at what the Ukrainians themselves have said, they have expressed a willingness to consider giving up certain territories. However, one of their core arguments, which is very understandable, is that they need security guarantees – not of the kind offered by the Budapest Memorandum but through NATO membership or an extension of the U.S. nuclear umbrella over Ukraine. Something tangible to prevent future wars," Kalm said.

Kalm believes there is no need to be overly fearful of Trump's term.

"Logically, the United States needs allies. Even if we consider their primary competition as they see it – the rivalry with China – they will need allies to counter China effectively. With such a strong, efficient and functional security organization as NATO, I see no reason to dismantle it or withdraw from it. Rational thinking affirms NATO's crucial role in all of our security, including that of the United States," Kalm concluded.

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