European Union leaders gather on Monday to discuss how to bolster the continent’s defences against Russia and how to handle US President Donald Trump after his decision to impose tariffs on goods from Canada, Mexico and China.

At a royal palace-turned-conference centre in Brussels, the leaders of the EU’s 27 nations will also lunch with NATO Secretary General Mark Rutte and dine with British Prime Minister Keir Starmer.

Antonio Costa, the president of the European Council of EU leaders, has billed the one-day gathering as a “retreat” devoted to defence policy rather than a formal summit, aiming for an open discussion without any official declaration or decisions.

The first session focuses on geopolitics and relations with the United States, meaning Trump’s sweeping weekend move on tariffs is certain to come up – particularly as EU officials fear they may soon face similar measures.

Trump, who began his second term as president on Jan. 20, will also be a major factor in the talks on defence, as he has demanded that European nations spend much more on their own protection and rely less on the United States via the NATO security alliance.

Trump’s call for EU member Denmark to cede Greenland to the United States - and his refusal to rule out military action or economic pressure to force Copenhagen’s hand - has also added strains to transatlantic ties.

The EU leaders are expected to discuss what military capabilities they need in the coming years, how they could be funded and how they might cooperate more through joint projects.

“Europe needs to assume greater responsibility for its own defence,” Costa said in a letter to the leaders. “It needs to become more resilient, more efficient, more autonomous and a more reliable security and defence actor.”

FINDING FUNDING

The funding discussion will be especially tough, according to diplomats, as many European countries have little room in their public finances for big spending hikes.

Some countries, such as the Baltic states and France, advocate joint EU borrowing to spend on defence. But Germany and the Netherlands are staunchly opposed.

One compromise could be to borrow to finance loans rather than grants for defence projects, according to some diplomats.

European countries have ramped up defence spending in recent years, particularly since Russia’s 2022 invasion of Ukraine, which brought war to the EU’s borders.

But many EU leaders have said they will need to spend even more. Trump has said NATO’s European members should spend 5% of GDP on defence - a figure no member of the alliance including the United States currently reaches.

Last year, EU countries spent an average of 1.9% of GDP on defence - about 326 billion euros ($334.48 billion), according to EU estimates.

That is a 30% increase from 2021, according to the EU. But it also masks wide divergences among EU countries.

Poland and the Baltic states are among the biggest defence spenders in GDP terms, with Warsaw leading the pack at more than 4.1%, according to NATO estimates. But some of the EU’s biggest economies such as Italy and Spain spend much less - about 1.5% and 1.3% respectively.

($1 = 0.9747 euros)