Ursula von der Leyen sets EU agenda after Trump trade deal backlash

Ursula von der Leyen, the European Union’s chief executive, will give her annual State of the Union address today, laying out the European Union’s priorities for the coming year. She speaks amid intense political pressure following a summer filled with backlash to a trade deal U.S. President Donald Trump offered.

Last year, she was re-elected for a second term, but the President of the European Commission now faces a tricky balancing act. Conversely, she doesn’t want to appear unrealistic in leadership and unity. On the other hand, she has to account for lawmakers, businesses, and voters who believe the U.S. deal shortchanged Europe.

Von der Leyen will take the floor in Strasbourg at 9 a.m., delivering a speech whose tradition is to lay out the bloc’s political direction. She is set to emphasise Europe’s defence, demanding new investment and closer co-ordination in a growing global insecurity. Alongside security, she will concentrate on raising the continent’s economic competitiveness to confront the rising challenge from China and protect European jobs.

She is championing a stepped-up approach to Ukraine, with continued financial and military support, while she pushes for stronger sanctions against Russia. In addition to these priorities, officials say, she wants to highlight progress on climate policy and the digital transition and project the EU as green and technologically advanced.

Yet the most urgent question for business leaders will be whether she can deliver concrete steps to cut red tape and put into practice the competitiveness plan by former ECB chief Mario Draghi. 

Trade deal sparks EU backlash

Casting a significant shadow over her speech is the tariff deal she made with Trump in July at his Turnberry golf resort in Scotland where EU tariffs were abolished on U.S. industrial goods and market barriers for U.S. farm produce were clamped down on. In retaliation, Trump imposed a 15 % tax on most EU products, doing away with low or zero duties that had existed before his second term.

The response in Europe has been furious. It was an “act of submission” and “another form of slavery,” France’s former prime minister François Bayrou said. A poll published this week found that 77 % of people in the EU’s five biggest countries believe the deal is weighted in favor of the United States. Just 2% say that it’s good for Europe. Over half said they would support boycotting U.S. products, with the others desiring von der Leyen to make her exit.

European officials have defended the deal as a necessary compromise that averted a destructive trade war. Businesses, it is said, wanted certainty, especially with U.S. security guarantees still vital to the defence of Europe.

But a broad opposition exists inside Parliament. Socialists and Greens accuse Von der Leyen of bending to Washington pressure. Even some in the centre-right European People’s Party, her own political family, have voiced unease.

Alberto Alemanno, a professor of EU law at HEC Paris, said von der Leyen was being made a scapegoat. He argued that while she embodied the EU’s weaknesses, those failings were not hers. According to him, she could not single-handedly retaliate against the United States, respond decisively to the conflict in Gaza, or broker peace in Ukraine.

Von der Leyen fights to restore trust

The State of the Union address will be watched closely across Europe. For von der Leyen, it is an opportunity to reset the political agenda and drum up support when there are increasing signs of public unrest.

She’ll highlight the EU’s global role, its role in defending Ukraine, and even its role in helping to shape trade and climate rules. However, with the Trump deal still leading the news, the question is whether her message can restore trust.

A debate will follow her speech to Parliament. Markets, industry groups, and allies elsewhere will be seeking indications of how the EU plans to handle the wars, trade, and competition from others worldwide.

This could be von der Leyen’s most challenging State of the Union yet.

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