Europe Council President Antonio Costa announced on Friday (June 27) that NATO member countries have agreed to more than double their defense spending targets. This move is expected to rebalance trade relations between Europe and the United States, and result in Europe purchasing more American weapons.
During the NATO summit held this week in The Hague, Netherlands, leaders from various countries pledged to increase defense and security expenditures from 2% to 5% of their Gross Domestic Product (GDP) within the next ten years. U.S. President Trump said that this is a significant victory for the United States, Europe, and Western civilization.
Costa, in an interview with CNBC, mentioned that increasing the purchase of American weapons resolved the main trade issues between Europe and the United States. He emphasized the decision to strengthen their own position and take on greater responsibility in the defense sector. Costa expressed confidence that by addressing this major issue, a pathway is now paved for resolving other challenges ahead.
He also noted that a portion of the increased defense spending will be allocated towards procuring American equipment. By increasing the purchase of U.S. military gear, it will lead to a rebalance in trade relations. This underscores the importance of not separating defense negotiations from trade talks, which is crucial for the United States, and the issue has now been resolved.
Prior to serving as the Europe Council President, Costa was the Prime Minister of Portugal. He reiterated Trump’s statement that this military agreement represents a “major victory”, further stating that the agreement effectively redistributes the defense burden among countries.
In early April, Trump granted a 90-day exemption period for various economies to negotiate trade agreements before implementing retaliatory tariffs. If Trump decides not to extend the exemption period after 90 days, the U.S. will start imposing reciprocal tariffs on countries. The European Union is among the trade partners eager to reach an agreement with the U.S. before the deadline.
Following the EU summit in Brussels on Thursday (June 26), President of the EU Commission, Ursula von der Leyen, revealed that the EU has received the “latest documents” from the U.S. regarding further tariff negotiations and is evaluating the content.
“Our information today (Thursday) is clear. We are prepared to reach an agreement. At the same time, we are also preparing for the possibility of not reaching a satisfactory agreement,” she stated.
German Chancellor Merkel urged the EU to reach a “swift and uncomplicated” trade deal rather than a “slow and complex” one. French President Macron also called for a speedy and practical trade agreement, but emphasized that France will not accept unbalanced terms.