I addressed a group of more than 100 European ambassadors recently on the big challenges facing the continent this year and next. My main point to these senior diplomats was that, perhaps counterintuitively, Europe’s biggest external challenges over the next 12 months will come from Russia and China, rather than the US. Europe’s relationship with Trump’s America remains difficult.
The US president has weakened confidence in Nato, raised new transatlantic trade tensions and introduced uncertainty into everything from US support for Ukraine to his territorial designs on Greenland. Yet paradoxically, and notwithstanding Trump’s latest tariff threats over the EU’s outreach to Canada, the transatlantic relationship is becoming the more stable part of Europe’s external environment. Not stable, but more stable.
Compared with Russia and China, Europe’s disputes with Washington remain somewhat bounded – and largely negotiable. Ukraine’s rapidly expanding drone capabilities, its military innovation and battlefield experience have made Kyiv a more valuable partner for Washington. US defence companies are also benefiting from Europe’s military support for Ukraine and rearmament against Russia.
The US, Denmark and Greenland now say they have struck a deal to allow the US to develop a significant military presence on Greenland. The devil will be in the detail, but they have much stronger incentives to reach an accommodation than to allow the issue to become a lasting source of confrontation. Trade tensions more broadly will persist, particularly over European regulation of American tech companies.
The same is true of Nato, which has lost credibility because of Trump’s frequent admonishments. Nonetheless, these disputes are among countries with deeply interconnected security and economic interests. The risks posed to Europe by Russia and China are more structural – and increasingly point towards escalation.
Russia is becoming more dangerous because it is becoming weaker. The Kremlin is running out of cheap and politically painless ways to finance its war in Ukraine. Its original budget assumptions for 2026 have been overtaken by events.
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