European Union leaders will convene on Monday to explore strategies for enhancing the continent’s defenses against Russia and addressing the implications of U.S. President Donald Trump‘s recent tariff impositions on goods from Canada, Mexico, and China.

The meeting will take place at a former royal palace now serving as a conference center in Brussels, where the leaders of the EU’s 27 member states will also share lunch with NATO Secretary General Mark Rutte and dinner with British Prime Minister Keir Starmer.

Antonio Costa, the president of the European Council, has characterized this one-day event as a “retreat” focused on defense policy, rather than a formal summit, encouraging candid discussions without the expectation of official resolutions or declarations.

The initial session will center on geopolitics and U.S. relations, making it likely that Trump’s recent tariff actions will be a significant topic, especially as EU officials anticipate facing similar trade measures in the near future.

As Trump begins his second term, his influence will be pivotal in discussions regarding defense, particularly his insistence that European nations increase their defense spending and reduce reliance on the United States through NATO. His controversial suggestion that Denmark should relinquish Greenland to the U.S., along with his ambiguous stance on potential military or economic pressure, has further complicated transatlantic relations.

The EU leaders are anticipated to deliberate on the military capabilities required for the future, potential funding mechanisms, and opportunities for enhanced collaboration through joint initiatives. “Europe must take on greater responsibility for its own defense,” Costa emphasized in a letter to the leaders. “It must become more resilient, efficient, autonomous, and a more dependable security and defense entity.”

FUNDING CHALLENGES

Diplomats indicate that discussions surrounding funding will be particularly challenging, as numerous European nations have limited capacity in their public budgets for significant increases in spending. Some nations, including the Baltic states and France, support the idea of collective EU borrowing to enhance defense expenditures. However, Germany and the Netherlands firmly oppose this approach.

A potential compromise suggested by some diplomats involves borrowing to provide loans instead of grants for defense initiatives. In recent years, European nations have significantly increased their defense budgets, especially following Russia’s invasion of Ukraine in 2022, which brought conflict to the EU’s doorstep.

Many EU leaders acknowledge the necessity for even greater spending. President Trump has stated that NATO’s European members should allocate 5% of their GDP to defense—a target that no member, including the United States, currently meets. According to EU estimates, last year, EU countries averaged 1.9% of GDP on defense, amounting to approximately 326 billion euros ($334.48 billion). This represents a 30% rise from 2021, although it conceals substantial disparities among EU nations.

Poland and the Baltic states rank among the highest defense spenders relative to GDP, with Poland leading at over 4.1%, as per NATO estimates. In contrast, some of the EU’s largest economies, such as Italy and Spain, allocate significantly less—around 1.5% and 1.3%, respectively.