President of the European Commission Ursula von der Leyen committed to an “unflinching, united, and proportional” response to President Donald Trump’s threats to increase tariffs on the European Union in response to their lack of support over Greenland, though she stressed she preferred a cooperative approach.
Von der Leyen embraced a “A Spirit of Dialogue,” the World Economic Forum’s theme for this year’s summit in Davos, Switzerland, during her speech Tuesday. She announced her economic vision for the EU, focusing on “European independence.”
She also acknowledged the ongoing geopolitical tensions between the United States and the EU regarding Greenland, specifically Trump’s announcement that 10% tariffs would go into effect Feb. 1 for eight European countries.
She said that if Trump continued with the proposed tariffs, then the EU would respond with an “unflinching, united, and proportional” response. Yet, even with her firm tone, she would rather focus on cooperation than retaliation.
“Arctic security can only be achieved together. This is why the proposed additional tariffs are a mistake, especially between long-standing allies,” said von der Leyen. “The EU and U.S. have agreed to a trade deal last July. And in politics as in business, a deal is a deal. And when friends shake hands, it must mean something.”
“Plunging us into a dangerous downward spiral would only aid the very adversaries we are both so committed to keeping out of our strategic landscape,” she said.
At the beginning of her speech, von der Leyen focused on the changing world and the need for Europe to be independent. She acknowledged the world has changed a lot since the first World Economic Forum in 1971, but the core tenet of that meeting, the importance of dialogue, “has remained,” she said. She recognized the effects that “geopolitical shocks” can have, but also inferred they could be a blessing.
“Geopolitical shocks can and must serve as an opportunity for Europe,” von der Leyen said. “And in my view, the seismic change we are going through today is an opportunity, in fact, a necessity, to build a new form of European independence. And this need is neither new nor a reaction to recent events; it has been a structural imperative for far longer.”
“So when I used this term, ‘European independence’ around a year ago, I was surprised at the skeptical reactions,” she said. “But less than one year on, there is now a real consensus around this. The sheer speed and almost unthinkable scale of the change have driven this, but the underlying imperative is still the same.”
Von der Leyen said the continent must recognize that the old order is no more and that Europe must implement change. She then called for a new Europe, announced a new trade deal, and teased a future major economic partnership.
“Of course, nostalgia is part of our human story, but nostalgia will not bring back the old order. And playing for time and hoping for things to revert soon will not fix the structural dependencies we have,” von der Leyen said. “So my point is, if this change is permanent, then Europe must change permanently too. It is time to seize this opportunity and build a new, independent Europe. And ladies and gentlemen, this new Europe is already emerging.”
She announced a new trade agreement with Latin America and the EU, a “market worth over 20% of global GDP.”
“It was a breakthrough after 25 years of negotiations,” von der Leyen said. “And with it, the European Union and Latin America have created the largest free trade zone in the world, a market worth over 20% of global GDP, 31 countries with over 700 million consumers aligned with the Paris Agreement.”
“So this agreement sends a powerful message to the world that we’re choosing fair trade over tariffs, partnership over isolation, sustainability over exploitation, and that we are serious about derisking our economies and diversifying our supply chains,” she added.
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She also mentioned her plans to visit India. She said she was negotiating an agreement with the country, which she called “the mother of all deals.” It is not finished yet, but expressed optimism that it would be soon. She categorized it as proof that Europe was serious about its economic independence and 21st-century goals.
“And right after Davos, I will travel to India,” von der Leyen said. “There’s still work to do, but we are on the cusp of a historic trade agreement. Indeed, some call it the mother of all deals, one that would create a market of 2 billion people, accounting for almost a quarter of global GDP, and crucially, that would provide a first-move advantage for Europe, with one of the world’s fastest-growing and most dynamic continents. Europe wants to do business with the gross centers of today and the economic powerhouses of this century, from Latin America to Indo-Pacific, and far beyond.”
“Europe will always choose the world, and the world is ready to choose Europe,” she boasted.