Europe to America: ‘We Are Looking for New Partners’

Foreign Policy · Feb 13, 2026 · Collected from RSS

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One year ago at the Munich Security Conference, U.S. Vice President J.D. Vance stunned Europe’s leaders with a public scolding that scarred the continent into thinking about a future without Washington’s embrace. On the latest episode of FP Live, I spoke with a group of leaders on the main stage at this year’s Munich summit to check the pulse of the trans-Atlantic relationship. Our session was titled “Tariff-fying Times”—an obvious play on the White House’s economic coercion—and guests included World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala, German Vice Chancellor Lars Klingbeil, Finnish President Alexander Stubb, and U.S. Sen. Thom Tillis. Subscribers can watch the full conversation on the video box atop this page or download the free FP Live podcast. What follows here is a condensed and lightly edited transcript. Ravi Agrawal: Director-General Okonjo-Iweala, we’re now in year two of U.S. President Donald Trump’s second term. This time last year, the word you kept using was “chill.” You were telling us to wait and see what happens when it comes to tariffs. Well, now a year has passed, and we have some data. We know what’s happened. You’ve begun to sound a lot more concerned about the state of affairs. Ngozi Okonjo-Iweala: When I said “chill,” it wasn’t that I wasn’t concerned. I was very concerned. But I meant that reacting quickly to these announcements without thinking through what kind of approach you need to have was not the best way to go. If you start a tariff war, can you carry it through? Would it be better to have dialogue? So that’s why I said “chill.” RA: So take us to 2026 now. How concerned are you? NOI: Oh, I’m still concerned. We’ve got a situation in which the U.S. average weighted tariffs have now gone from about 2.6 to about 18 percent in announced tariffs, according to our numbers. The actual applied tariffs are closer to 14 percent. That’s still a big leap in protective measures. I will always say I may not agree with the United States’ unilateral actions or approach to dealing with the issues, but I do agree with a lot of their criticisms of the system. The system has not evolved and has not been quick to respond to the changing world. We may not like the action, but we must take the signal that we need to reform many of the things with the world trading system. This is where we are now. I want to make a second point—and I know people don’t like to hear this—but in spite of the massive disruption of the system and the undermining of the global trade rules, the system is proving resilient. I will keep saying it: 72 percent of the world’s goods trade is still on WTO terms. Battered, bruised, but not broken. Those are my words. The system is still largely functioning. So, partly, this explains my calm, chill nerves. I’ll end by saying that I am very proud of my members, because they didn’t descend into tit-for-tat with the United States. If they’d done that, the world would be much worse off than we are now. RA: Vice Chancellor Klingbeil, about an hour ago we all heard Chancellor Friedrich Merz say that the international order is over. That sounds so different from what we’ve just heard from the director-general. Lars Klingbeil: First of all, Chancellor Merz gave a very powerful and very good speech. He was orienting the whole Munich Security Conference, and he analyzed that the world order, as we know, is over. He was very clear that Europe has to work very hard, that we are an attractive and also very powerful center in this world. Germany has to do the homework for that; Europe has to do homework. We can work on our European sovereignty. We can work on competitiveness. We can work on defense. If we do that, Europe will have a powerful place in this new world order. And then there was also a very clear signal that we are looking for new partners. I’m really happy that after 26 years, we now have this EU-Mercosur deal. I’m very happy that we now have this agreement with India. And let me say, I’m convinced tariffs are bad for the people. Tariffs are bad for the economy on both sides of the Atlantic. But if the U.S. government is willing to go this way, we have to find other partners. We have to strengthen our economic growth. RA: President Stubb, you represent a small country, at least by population size. And I’m worried when I look at new data from UNCTAD, the U.N. body on trade and development, which shows that U.S. tariffs gave a competitive advantage to bigger, rich countries over smaller ones. In the last year, that difference has been exacerbated. Richer countries have been able to strike their own special deals with the United States while smaller countries get left behind. What advice do you have for the world if we are headed into this new order where bigger countries can manage and the weaker ones suffer? Alexander Stubb: Join the European Union. It gives you protection. (laughter) RA: What about the rest? AS: To rewind, I think what we’re seeing right now with tariffs, and protectionism in general, is the reversal of the world that we experienced after the end of the Cold War. The things that were supposed to bring us together—like currency, energy, trade, technology, even information—are now being weaponized. Now, I want to counter your thesis a little bit. A country like Finland has not been hit any worse than Germany vis-à-vis the United States. Why? Because there’s exclusive competence on customs, there’s exclusive competence on trade, there’s an exclusive competence on competition policy, and there is exclusive competence on currency or monetary policy in the European Union. So we’re shielded from that. After the Greenland issue, when the United States threatened to raise tariffs to 25 percent on Finland—well, you can’t do that because then it’s 25 percent for the European Union. So we feel quite good in this place. What should smaller states or middle powers do? I think we should lean in and support the multilateral trading institutions, such as the WTO. I think what Europe will end up doing is hedging and de-risking a little bit. That’s why you see a quick trade agreement finally with Mercosur. You see it in the trade agreement with India. I don’t exclude some kind of investment agreement in the long run with China either. You’re going to start seeing this type of behavior coming from other countries as well. Instead of leaning in on tariffs and a multipolar world and retaliation, people are going to say, “OK, let’s go back to the rules that existed because they were much more stable.” This pertains to small and big countries. RA: Senator Tillis, you’ve emerged as a rare Republican lawmaker who’s criticized President Trump on the issue of tariffs. Are you getting a sense that one year in, the White House and Trump are getting less ideological on tariffs? Thom Tillis: Actually, I just want to make it clear. I haven’t criticized President Trump on tariffs. I’ve criticized the people who have convinced him that this is the right way to move forward. Look, we have in— RA: Hang on. Are you sure that the president himself doesn’t believe that tariffs are a good thing? I’m pretty sure he’s spoken in public— TT: The United States is a large, complex country. If any president asserts that they by themselves could create strategies and execute on them, they’re lying to you. They rely on experts, and I believe that there are experts giving the wrong signals to the president on this issue. RA: Senator, I’ll confess I’m slightly gobsmacked. It was my understanding that the president himself was very ideological about tariffs. But the basic question remains the same: If these advisors are pushing him in this direction that you clearly disagree with, is pressure on them coming to bear? TT: Unless the world of economics has flipped since my time as a partner at Pricewaterhouse, how can you possibly expect prolonged imposition of tariffs in excess of 10 percent to not ultimately affect consumers? That’s just the way the world works. Most firms can absorb 10 percent tariffs, and they do so competitively until they figure out where the market settles down. But when you impose a 50 percent tariff on Brazil because you didn’t like a judicial outcome, that’s not a strategic use of tariffs. RA: You’re saying what every single economist says. How is this not breaking through to the White House? TT: The president has to process a lot of signals through a lot of different channels. On one hand, he’s hearing rightfully from [U.S. Ambassador to the U.N.] Mike Waltz and others that Europe has failed to pay a fair share in NATO. Now they’re catching up. But if you’re dealing with a country that is falling short on their burden-sharing, and we have a trade deficit with them, then those are two data points that the president is responding to as an executive, not as somebody who’s crafting the strategy. Trump is hearing these signals and going, “OK, on one hand, we’re paying more for our mutual defense, and on the other hand, we’re leaving money on the table in terms of trade imbalances.” So you have to be strategic. In Davos, I said you have to de-risk at some level. But to make the statement that the free world, and the family of NATO nations, is no more is hyperbolic and will not withstand the test of time because you have a Congress and an American people that understand that our future, past, and present is rooted in Western rule-of-law democracy. RA: That was certainly an unpopular feeling in Davos, given the threats against Greenland. Director-general, to return to that earlier point about smaller countries being hard done by: the data suggests they are particularly disadvantaged by U.S. tariffs. What should the WTO do to allow smaller countries to have a more equitable rules-based system? NOI: Well, we have to look carefully at the data. As the president [Stubb] said, it’s not all small countries. It depends on what your trade is. For African countries, this is one time where