- Trade has been one of the most contentious issues for the U.S. and Europe over the last four years.
- As current President Donald Trump fails to get a second term in office, anti-establishment politicians in Europe "will miss ... the megaphone" for their policy priorities, Enrico Letta, former prime minister of Italy, told CNBC.
- Biden's projected win is also a welcome development for European officials as it is likely to put pressure on the U.K. government to strike a deal with the EU.
LONDON — European leaders have warmly congratulated Democrat Joe Biden following his projected election win, a victory that comes after four years of fractious relations with President Donald Trump.
The transatlantic relationship deteriorated significantly after Trump's arrival at the White House in 2017, with disagreements over international trade, defense and technology. European officials have also struggled with Trump's direct style and his use of Twitter, which he often used as a means to communicate policy.
However, they are hoping the relationship will improve following Biden's win, according to NBC projections.
Ursula von der Leyen, president of the European Commission, spoke about a "renewed" partnership between the U.S. and Europe when congratulating President-elect Biden for the result over the weekend.
German Chancellor Angela Merkel, French President Emmanuel Macron and Italy's Giuseppe Conte were among the many heads of state congratulating Biden on the result.
Trade has been one of the most contentious issues for the U.S. and Europe over the last four years. At the start of his presidency, Trump ended talks over a U.S.-EU trade deal, imposed higher tariffs on imported European steel and aluminum products, and threatened to do the same on European car imports.
They have also clashed over subsidies in a long-standing dispute involving aircraft makers Boeing and Airbus. The European Union is reportedly looking at imposing tariffs worth $4 billion on U.S. goods after the World Trade Organization agreed that the U.S. granted illegal aid to Boeing.
"We would not be surprised if the U.S. and the EU defuse or even settle this dispute shortly after the Biden administration takes office on 20 January 2021," Holger Schmieding, chief economist at Berenberg, said in a note on Monday.
Under Trump's leadership, the U.S. changed its position on international trade, favoring bilateral agreements and using the imposition of import tariffs to put pressure on trading partners and to promote an "America First" agenda.
"Biden will take the U.S. back to the table of multilateralism, although the U.S. will not be able to play a role remotely like it did until quite recently," Erik Nielsen, chief economist at UniCredit, said in a note.
The European Union has seen increased support for anti-establishment parties in the wake of the debt and migration crises that have affected the region in recent years, and Trump was an inspiration for many of these politicians.
However, as Trump fails to get a second term in office, anti-establishment politicians in Europe "will miss a lot; I'd say, the megaphone, the echo, the strong engine and the strong vocal positions" that characterized the president, Enrico Letta, former prime minister of Italy, told CNBC's Squawk Box Europe on Monday.
Letta, who worked with Biden when he served as vice president of the United States, also described the latest U.S. vote as "the most important European election."
"I think the future of the U.S.-Europe relationship will be better, full of room for changing something important and I think this pandemic is the first big test, because we have never had such a crisis without a transatlantic response or a transatlantic dialogue," Letta said.
The EU is still embroiled in negotiations with the United Kingdom over their future relationship, starting in 2021, after the transition period following the U.K.'s departure from the bloc ends.
They have only a few weeks left to agree on their new trade arrangements, and it is unclear whether they will overcome their outstanding differences in this time. Failure to reach a deal would increase costs for exporters on both sides and potentially put at risk the Good Friday Agreement, a peace accord between Northern Ireland and the Republic of Ireland.
Biden's outright support for the Good Friday Agreement was a welcome development for European officials and is likely to put pressure on the U.K. government to strike a deal with the EU.
"When it comes to Brexit, the Biden victory means that the Good Friday Agreement is now safe, and Boris Johnson will therefore now need to knock his 'hard-Brexit advisors' into place and get the deal done," UniCredit's Nielsen said on Sunday.
Enrico Letta also said he believes the projected Biden win makes an EU-U.K. deal more likely.
"With Trump out of the White House, it would be more difficult for Boris Johnson to get a no-deal … so if I have to bet, I bet on a deal, because it is clear that Biden won't give a sort of alliance or special alliance against the European Union," he said.