Trade war fears loom as EU leaders meet to boost defence amid Trump's tariff threats

Nevin Al Sukari - Sana'a - France's President Emmanuel Macron (L) speaks with Slovenia's Prime Minister Robert Golob prior to the start of the round-table meeting at the informal EU leaders. — AFP pic

BRUSSELS, Feb 4 — The threat of a transatlantic trade war loomed large Monday over a gathering of European leaders aimed at boosting the continent’s defences in the face of an aggressive Russia.

The EU’s 27 leaders, Britain’s prime minister and the head of NATO were in Brussels to brainstorm ways to ramp up European defence spending—a key demand that President Donald Trump has made to America’s allies.

But it was Trump’s repeated threat to target Europe “soon”—after having ordered tariffs on Canada, Mexico and China—that set the meeting’s tone.

“If we are attacked in terms of trade, Europe—as a true power—will have to stand up for itself and therefore react,” French President Emmanuel Macron warned.

The tough talk—which came before Trump temporarily backed down after talks with Canada and Mexico—mirrored the message from the European Commission, which said the EU would “respond firmly” to any US tariffs.

Poland’s Prime Minister Donald Tusk, whose country currently holds the EU presidency, labelled trade wars “totally unnecessary and stupid”.

“There are no winners in trade wars,” EU foreign policy chief Kaja Kallas said.

Trade aside, Trump has rattled US allies with a series of direct threats—not least his insistence that he wants to acquire strategically important Greenland, an autonomous Danish territory.

Denmark’s prime minister, Mette Frederiksen, reiterated in Brussels that the Arctic island was “not for sale”.

Never always tranquil

The trade threats from the White House add an unwelcome new layer to the already complex challenge of bolstering European defences—faced with a menacing Russia and the spectre of Washington pulling back.

Trump has made clear Europe can no longer take US protection for granted, insisting that NATO countries more than double their defence spending target to five percent of their total economic output—a goal out of reach for many.

He has also vowed to bring a quick end to Russia’s war in Ukraine, leaving Europeans fearful he could sideline them and force Kyiv into a bad deal.

NATO chief Mark Rutte insisted the trade tensions would not weaken the alliance’s collective deterrence.

“There are always issues between allies—it is never always tranquil and happy going,” he said.

European nations have ramped up their military budgets since Russian President Vladimir Putin launched the all-out invasion of Ukraine almost three years ago.

But EU officials concede they are still not arming themselves fast enough as warnings grow that Moscow could attack one of their own in the coming years.

Finance tools

There is widespread consensus across Europe on the need to spend more on defence, with Brussels estimating the needs at 500 billion euros ($510 billion) over a decade.

But the question remains how to do it.

Key dividing lines revolve around the way to fund investments, whether EU cash should be spent only on EU arms, and NATO’s role.

European Commission chief Ursula von der Leyen after the talks suggested relaxing EU budget rules for defence and getting the bloc’s lending arm to work more with weapons producers.

On the crunch issue of calls for possible joint borrowing, there appeared no clear movement.

But von der Leyen indicated the EU could potentially look to use it to fund common projects in crucial areas such as air defence.

The leaders’ discussion is now set to feed into proposals being drawn up by Brussels next month on the future of EU defence—before another round of talks on the issue in June.

UK security deal?

As doubts swirl over the transatlantic relationship, many were keen to step up ties with an old friend: Britain.

Prime Minister Keir Starmer was back in the fold—at least for one dinner—as the first UK leader to attend a European Council gathering since the country withdrew from the EU five years ago.

Starmer said he wanted to work with EU leaders to “crush Putin’s war machine” by further targeting Russia’s economy.

The British leader, who has sought to reset relations after the rancour of Brexit, said he wanted to strike a “ambitious” security partnership with the EU.

That could bring Britain, with its potent military and large defence industry, a little closer—with security cooperation to top the agenda at an EU-UK summit planned for May.

But the bitter legacy of Brexit remains.

Numerous EU diplomats said there cannot be progress until a dispute over fishing rights is resolved and London drops its opposition to a youth mobility scheme proposed by Brussels. — AFP