EU Expected to Navigate Tariff Threats and Defense Spending Needs With Flexible Fiscal Strategy

The recent US negotiations with Canada and Mexico have set a precedent for how the European Union might handle its tariff disputes with President Donald Trump. His temporary pause on these tariffs, influenced by concessions on border security, reflects the transactional nature of his foreign policy. This dynamic is now playing out in the EU-US relationship, where the threat of tariffs is intertwined with demands by Trump for NATO allies to spend 5% of gross domestic product on defense, far above the organization's 2% target.