EU tiptoes around Trump as it scales up its homegrown defence

Good morning. Last night EU leaders gave political backing to new initiatives to increase defence spending across the continent. At the same summit in Brussels, Hungary’s Viktor Orbán refused to endorse a statement in support of Ukraine, prompting the other 26 leaders to issue it in their names regardless. That, the EU Council president António Costa said with a glint in his eye, meant Budapest had “isolated itself . . . 26 is greater than one”.

Today, I explain why many EU leaders are treading the tightrope of calling for greater European autonomy while not directly blaming the US for spurring it. And our correspondent hears Brussels’ top trade official say there’s still no clarity on long-threatened US tariffs.

Have a great weekend.

Breaking up is hard to do

While EU leaders last night agreed on the need for Europe to “become more sovereign [and] more responsible for its own defence”, they were nowhere near as explicit about the reasons: an untrustworthy America.

Context: US President Donald Trump’s decisions to suspend military aid and intelligence support to Ukraine, and begin bilateral peace talks with Russia, have spooked EU capitals and prompted a scramble to boost defence spending and increase Europe’s ability to defend itself without American support.

In the private discussions among the EU’s leaders yesterday, there were important nuances in whether they framed the European rearmament push as a long-overdue responsibility or a Trump-imposed reaction, according to officials briefed on the talks.

While leaders such as France’s Emmanuel Macron spoke of the need for “strategic autonomy” from Washington — a long-standing Paris plea — others, including Denmark’s Mette Frederiksen urged the room not to make the initiative an overtly anti-Trump effort.

“The most important thing is, to be very frank, to re-arm Europe. And I don’t think we have a lot of time,” Frederiksen told reporters, urging her colleagues to “spend, spend, spend on defence and deterrence”.

There are also splits inside the 27 capitals as to whether a new Brussels-encouraged defence spending splurge should come with rules mandating how much of the cash must be spent on European weapons.

While all EU countries agree that the continent’s defence industry needs to grow, very few believe that it can sufficiently re-arm without buying US products, given the gap between European production capacity and its needs.

“Taking on greater responsibility for our own security as Europe does not mean neglecting the need for the closest possible alliance with the United States,” said Donald Tusk, Poland’s prime minister, as he arrived at the meeting. “By strengthening our defences, we should, in fact, improve transatlantic relations.”

Buried in the summit’s joint statement was an ambiguous olive branch that left the door open — with a caveat: “The European Council underlines the importance of working together with like-minded non-EU partners.”

Chart du jour: Pole position

The road ahead for European carmakers is shrouded in fog. Trade tensions, Chinese competition, a sluggish domestic market and an uncertain transition to electric vehicles have conspired to sink the sector’s share prices. The exception is Renault.

Bait and switch

After 48 hours of chaos in North America as Donald Trump imposes, then quickly lifts, tariffs on Mexico and Canada, the EU is bracing itself for its turn, writes Andy Bounds.

Context: US President Trump has announced that 25 per cent levies on all steel and aluminium imports would take effect on March 12, and unspecified “reciprocal tariffs” from April 2.

Sabine Weyand, the European Commission’s top trade official, said yesterday that Washington’s “flurry of statements” made it hard to prepare or negotiate.

“It is not clear yet which measures will be imposed exactly when and in what form,” the German told an event in Brussels.

Weyand, director-general of the commission’s trade department, said she did not know which products made from steel and aluminium would be covered.

As for the reciprocal tariffs, which would allegedly match EU tariffs on US imports, “it is unclear what will be hit and on what basis. And this is very important because we have said that if these measures go ahead, we will react immediately in a determined manner.”

The bloc has a package of retaliatory tariffs of up to 50 per cent on €4.8bn of US imports including jeans, bourbon and Harley-Davidson motorcycles ready to go in response to the metals move. But officials said that would be increased according to the size of Trump’s measures.

“It is difficult for us to understand what exactly the US is after, because the justifications for the various announcements keep changing,” Weyand added.

Does Trump simply want tax revenue, to change EU policies on digital regulation or force companies to invest in the US?

“That doesn’t make the co-operation easier. But our offer [to talk] stands and we hope that at some stage it will be picked up,” she said.

What to watch today

1. European Commission president Ursula von der Leyen and Council president António Costa hold talks with the leaders of Norway, Iceland, Turkey and the UK.

2. Meeting of EU justice ministers in Brussels.

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