Ursula von der Leyen was preparing to claim a rare victory on Saturday, sealing a trade pact with South America\u2019s biggest economies. Donald Trump had other ideas.<\/p>\n
Moments before von der Leyen stepped to the podium in Paraguay, the US president dropped a blistering announcement: He was piling more tariffs on Europe over its support for Greenland.<\/p>\n
As the European Union\u2019s top executive, von der Leyen was suddenly in an unexpected spotlight as people waited to see if she would publicly rebuke the US president\u2019s latest threat to unravel alliances built over decades.<\/p>\n
She didn\u2019t. And when her response came \u2014 a statement later that night \u2014 multiple officials and diplomats called it \u201cweak.\u201d<\/p>\n
\u201cPresident von der Leyen takes all decisions with one objective in mind: serving the best interests of the EU and its citizens,\u201d said Paula Pinho, chief spokesperson for the European Commission, the EU\u2019s executive arm.<\/p>\n
The moment illustrates a simmering frustration with von der Leyen\u2019s leadership that is beginning to boil. Her preference for trade concessions over confrontation with Trump has done nothing to impede Washington and little to benefit the EU, numerous officials have pointed out.<\/p>\n
\u201cEuropean appeasement strategy has failed,\u201d said Arancha Gonzalez Laya, Spain\u2019s former foreign minister, using historically fraught terms that several senior officials have used in private.<\/p>\n
Meanwhile, von der Leyen has slow-walked a promised economic revival plan back home, these officials added, leaving Europe more exposed to US bullying. That economic weakness and her weakness on trade are now all converging on Greenland, as Trump\u2019s tariff ultimatum over the Danish territory brings the US and EU to the brink of economic warfare.<\/p>\n
\u201cWhat Europe needs is an intelligent deterrence capacity to deal with predators,\u201d said Gonzalez Laya, who represented Spain during Trump\u2019s first term.<\/p>\n
Whether von der Leyen can carry the EU through this moment carries existential stakes. It will determine whether the bloc can protect Ukraine from Russian aggression and adapt to a new world order where power brokers like the US and China have quashed the international system Europe spent decades building.<\/p>\n
\u201cWe Europeans must make it clear that a red line has been reached,\u201d German Vice Chancellor Lars Klingbeil said on Monday.<\/p>\n
This assessment is based on conversations with more than a dozen officials and diplomats who have worked closely with von der Leyen and her team. They all spoke on the condition of anonymity to speak freely.<\/p>\n
Reelection vow<\/span><\/h3>\nVon der Leyen\u2019s pledge to focus on the bloc\u2019s economic competitiveness and security was the linchpin of her 2024 reelection for a second term atop the commission.<\/p>\n
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CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
She came armed with a 400-page plan of action from Mario Draghi, the former European Central Bank head and one of the continent\u2019s most respected economic minds. Europe could leverage its \u20ac20 trillion-plus ($23.2 trillion) single market and 450 million people to project geopolitical power globally, the argument went.<\/p>\n
Over a year later, however, much of the blueprint remains unfulfilled, while the US and China threaten to swallow Europe economically and Russia menaces on its borders.<\/p>\n
Some officials suggested that von der Leyen was more drawn to the spotlight of meetings with world leaders and international issues than the minutiae of domestic economic policies.<\/p>\n
\u201cAnyone who has worked with her knows that this claim is completely unfounded and lacks factual basis,\u201d Pinho said in response.<\/p>\n
Other officials argued that von der Leyen hasn\u2019t empowered the commissioners overseeing various policy files. Von der Leyen\u2019s team, they said, retains tight control over day-to-day operations across the EU\u2019s executive branch, drafting proposals that normally go through other departments, directing internal communications and making the final say on even minor job appointments.<\/p>\n
The result, they say, is delay at a time when Europe cannot afford it.<\/p>\n
Draghi himself cautioned in September that the EU was moving too slowly on needed economic reforms. \u201cTo carry on as usual is to resign ourselves to falling behind,\u201d he said in a speech, with von der Leyen in the audience.<\/p>\n
Pinho disputed the officials\u2019 perception, arguing the commission used \u201can inclusive decision process\u201d and that \u201cthe urgency mindset of this commission is blatantly clear.\u201d She said von der Leyen was also leading on economic files, citing the South American deal and late-stage trade negotiations with India.<\/p>\n
And von der Leyen\u2019s trade strategy with the US, Pinho added, was a faithful reflection of what EU leaders and businesses wanted from Brussels.<\/p>\n
Even von der Leyen\u2019s critics acknowledge she has led Europe through historic crises, often with success. Her centralized leadership may have even helped in these situations, they said.<\/p>\n
In her first term, von der Leyen put the EU in charge of coordinating vaccine purchases and convinced countries to take on joint debt to help people weather the economic fallout.<\/p>\n
Later, when Russia sent troops streaming into Ukraine, von der Leyen\u2019s team worked closely with US President Joe Biden to coordinate tough sanctions on Moscow. She then pushed Europe to sever its deep Russian energy ties and helped ensure that billions kept flowing to Ukraine, even after Trump cut off US aid.<\/p>\n
Economically, she hit Chinese electric vehicles with tariffs, despite intense German lobbying against the move.<\/p>\n
Then there is the trade deal with the Mercosur bloc of South American countries, the one von der Leyen was in Paraguay to sign on Saturday. The pact is the EU\u2019s largest-ever free-trade agreement. It took 25 years of stop-start negotiations to get it finalized.<\/p>\n
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CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
These are all major achievements, officials say. None of them were a given.<\/p>\n
Trump\u2019s return<\/span><\/h3>\nBut von der Leyen started her second term just weeks before Trump returned to the White House, quickly pulling attention to a potential transatlantic trade war and the loss of US support for Ukraine.<\/p>\n
The EU chief moved swiftly to strike a trade accord, even if it meant making painful compromises \u2014 a tactic that many EU countries endorsed.<\/p>\n
In July, von der Leyen flew to Trump\u2019s golf resort in Scotland to pose for thumbs-up photos with the president after signing a deal that accepted a 15% tariff on EU exports to the US, while removing all tariffs on US industrial goods and some agricultural products entering the single market.<\/p>\n
The deal \u201ccreates certainty in uncertain times,\u201d von der Leyen said at the time, echoing the sentiment of numerous EU capitals \u2014 and the desire to keep Trump on Europe\u2019s side in Ukraine.<\/p>\n
![\"\"](\"https:\/\/www.moneyweb.co.za\/wp-content\/uploads\/2026\/01\/4372029352-555x362.jpg\")
<\/p>\n
No certainly has arrived, though. And Trump continues to swerve on Ukraine.<\/p>\n
From the start, a group of officials warned that the EU was giving up more than it was getting. They argued that if the bloc didn\u2019t take a more forceful approach, the US would only return with extra requests later. They also cautioned that trade issues risked bleeding into other matters.<\/p>\n
Those voices grew when Washington expanded a 50% metals tariff to hundreds of additional products and started demanding changes to EU tech regulations.<\/p>\n
After this weekend, the deal is on life support. European Parliament leaders have said they will withhold their final approval for now, while others wonder why the pact was signed in the first place.<\/p>\n
More potential retaliation is also in the works.<\/p>\n
EU envoys are discussing whether to impose tariffs on \u20ac93 billion ($108 billion) of US goods if Trump follows through on his Greenland tariff threat. French President Emmanuel Macron will also ask the EU to activate its most powerful trade defense tool, the anti-coercion instrument, which could mean even more tariffs, new taxes on tech companies or targeted curbs on investments in the EU.<\/p>\n
EU leaders will hold an emergency meeting later this week to discuss the situation.<\/p>\n
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CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n
\u201cThere is a legally established European toolbox that can respond to economic blackmail with very sensitive measures, and we should now examine the use of these measures,\u201d said Klingbeil, who is also Germany\u2019s finance minister.<\/p>\n
There is a growing realization internally, one EU official said, that the bloc\u2019s current approach to the US is not going to get the desired results. But they see little chance of a muscular pivot.<\/p>\n
Meanwhile, the ECB last week noted that problems within the EU\u2019s own single market, touted as the bloc\u2019s biggest benefit, are actually creating higher trade barriers than the US \u2014 equivalent to levies of 67% for goods and 95% for services.<\/p>\n
The findings reflected a sentiment officials expressed: While von der Leyen is not to blame for Trump\u2019s erraticism, she hasn\u2019t done enough on the EU executive\u2019s core job to ease business within the single market.<\/p>\n
Yes, she is constrained by EU capitals that are frequently divided and at times blatantly obstructive. But she has also largely opted to stick with the bloc\u2019s consensus-based traditions, even as it increasingly becomes an obstacle to making quicker progress.<\/p>\n
\u201cToo often, excuses are made\u201d for the EU\u2019s plodding economic reforms, Draghi said in September. \u201cWe say it is simply how the EU is built. That a complex process with many actors must be respected. Sometimes inertia is even presented as respect for the rule of law. I think that is complacency.\u201d<\/p>\n
![\"\"](\"https:\/\/www.moneyweb.co.za\/wp-content\/uploads\/2026\/01\/437203090-555x377.jpg\")
<\/p>\n
Opportunity overtaken<\/span><\/h3>\nIt was telling that von der Leyen\u2019s attempt to trumpet one of her biggest accomplishments on Saturday was drowned out by the Trump bullhorn.<\/p>\n
The South American accord was meant to show Washington that Europe could find likeminded economic partners elsewhere, that it wouldn\u2019t always necessarily need the US.<\/p>\n
That sentiment didn\u2019t even last through the press conference. Attention was back on Trump before it even began, and back on the question of what to do with a US president that blares disdain for Europe.<\/p>\n
At some point, said one senior EU diplomat, Europe may have to decide that a relationship with the US is lost for now, that the costs outweigh the benefits.<\/p>\n
Greenland, they added, could be that point.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n
ADVERTISEMENT<\/p>\n
CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
She came armed with a 400-page plan of action from Mario Draghi, the former European Central Bank head and one of the continent\u2019s most respected economic minds. Europe could leverage its \u20ac20 trillion-plus ($23.2 trillion) single market and 450 million people to project geopolitical power globally, the argument went.<\/p>\n
Over a year later, however, much of the blueprint remains unfulfilled, while the US and China threaten to swallow Europe economically and Russia menaces on its borders.<\/p>\n
Some officials suggested that von der Leyen was more drawn to the spotlight of meetings with world leaders and international issues than the minutiae of domestic economic policies.<\/p>\n
\u201cAnyone who has worked with her knows that this claim is completely unfounded and lacks factual basis,\u201d Pinho said in response.<\/p>\n
Other officials argued that von der Leyen hasn\u2019t empowered the commissioners overseeing various policy files. Von der Leyen\u2019s team, they said, retains tight control over day-to-day operations across the EU\u2019s executive branch, drafting proposals that normally go through other departments, directing internal communications and making the final say on even minor job appointments.<\/p>\n
The result, they say, is delay at a time when Europe cannot afford it.<\/p>\n
Draghi himself cautioned in September that the EU was moving too slowly on needed economic reforms. \u201cTo carry on as usual is to resign ourselves to falling behind,\u201d he said in a speech, with von der Leyen in the audience.<\/p>\n
Pinho disputed the officials\u2019 perception, arguing the commission used \u201can inclusive decision process\u201d and that \u201cthe urgency mindset of this commission is blatantly clear.\u201d She said von der Leyen was also leading on economic files, citing the South American deal and late-stage trade negotiations with India.<\/p>\n
And von der Leyen\u2019s trade strategy with the US, Pinho added, was a faithful reflection of what EU leaders and businesses wanted from Brussels.<\/p>\n
Even von der Leyen\u2019s critics acknowledge she has led Europe through historic crises, often with success. Her centralized leadership may have even helped in these situations, they said.<\/p>\n
In her first term, von der Leyen put the EU in charge of coordinating vaccine purchases and convinced countries to take on joint debt to help people weather the economic fallout.<\/p>\n
Later, when Russia sent troops streaming into Ukraine, von der Leyen\u2019s team worked closely with US President Joe Biden to coordinate tough sanctions on Moscow. She then pushed Europe to sever its deep Russian energy ties and helped ensure that billions kept flowing to Ukraine, even after Trump cut off US aid.<\/p>\n
Economically, she hit Chinese electric vehicles with tariffs, despite intense German lobbying against the move.<\/p>\n
Then there is the trade deal with the Mercosur bloc of South American countries, the one von der Leyen was in Paraguay to sign on Saturday. The pact is the EU\u2019s largest-ever free-trade agreement. It took 25 years of stop-start negotiations to get it finalized.<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
These are all major achievements, officials say. None of them were a given.<\/p>\n
Trump\u2019s return<\/span><\/h3>\nBut von der Leyen started her second term just weeks before Trump returned to the White House, quickly pulling attention to a potential transatlantic trade war and the loss of US support for Ukraine.<\/p>\n
The EU chief moved swiftly to strike a trade accord, even if it meant making painful compromises \u2014 a tactic that many EU countries endorsed.<\/p>\n
In July, von der Leyen flew to Trump\u2019s golf resort in Scotland to pose for thumbs-up photos with the president after signing a deal that accepted a 15% tariff on EU exports to the US, while removing all tariffs on US industrial goods and some agricultural products entering the single market.<\/p>\n
The deal \u201ccreates certainty in uncertain times,\u201d von der Leyen said at the time, echoing the sentiment of numerous EU capitals \u2014 and the desire to keep Trump on Europe\u2019s side in Ukraine.<\/p>\n
<\/p>\n
No certainly has arrived, though. And Trump continues to swerve on Ukraine.<\/p>\n
From the start, a group of officials warned that the EU was giving up more than it was getting. They argued that if the bloc didn\u2019t take a more forceful approach, the US would only return with extra requests later. They also cautioned that trade issues risked bleeding into other matters.<\/p>\n
Those voices grew when Washington expanded a 50% metals tariff to hundreds of additional products and started demanding changes to EU tech regulations.<\/p>\n
After this weekend, the deal is on life support. European Parliament leaders have said they will withhold their final approval for now, while others wonder why the pact was signed in the first place.<\/p>\n
More potential retaliation is also in the works.<\/p>\n
EU envoys are discussing whether to impose tariffs on \u20ac93 billion ($108 billion) of US goods if Trump follows through on his Greenland tariff threat. French President Emmanuel Macron will also ask the EU to activate its most powerful trade defense tool, the anti-coercion instrument, which could mean even more tariffs, new taxes on tech companies or targeted curbs on investments in the EU.<\/p>\n
EU leaders will hold an emergency meeting later this week to discuss the situation.<\/p>\n
\n\nADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n
\u201cThere is a legally established European toolbox that can respond to economic blackmail with very sensitive measures, and we should now examine the use of these measures,\u201d said Klingbeil, who is also Germany\u2019s finance minister.<\/p>\n
There is a growing realization internally, one EU official said, that the bloc\u2019s current approach to the US is not going to get the desired results. But they see little chance of a muscular pivot.<\/p>\n
Meanwhile, the ECB last week noted that problems within the EU\u2019s own single market, touted as the bloc\u2019s biggest benefit, are actually creating higher trade barriers than the US \u2014 equivalent to levies of 67% for goods and 95% for services.<\/p>\n
The findings reflected a sentiment officials expressed: While von der Leyen is not to blame for Trump\u2019s erraticism, she hasn\u2019t done enough on the EU executive\u2019s core job to ease business within the single market.<\/p>\n
Yes, she is constrained by EU capitals that are frequently divided and at times blatantly obstructive. But she has also largely opted to stick with the bloc\u2019s consensus-based traditions, even as it increasingly becomes an obstacle to making quicker progress.<\/p>\n
\u201cToo often, excuses are made\u201d for the EU\u2019s plodding economic reforms, Draghi said in September. \u201cWe say it is simply how the EU is built. That a complex process with many actors must be respected. Sometimes inertia is even presented as respect for the rule of law. I think that is complacency.\u201d<\/p>\n
<\/p>\n
Opportunity overtaken<\/span><\/h3>\nIt was telling that von der Leyen\u2019s attempt to trumpet one of her biggest accomplishments on Saturday was drowned out by the Trump bullhorn.<\/p>\n
The South American accord was meant to show Washington that Europe could find likeminded economic partners elsewhere, that it wouldn\u2019t always necessarily need the US.<\/p>\n
That sentiment didn\u2019t even last through the press conference. Attention was back on Trump before it even began, and back on the question of what to do with a US president that blares disdain for Europe.<\/p>\n
At some point, said one senior EU diplomat, Europe may have to decide that a relationship with the US is lost for now, that the costs outweigh the benefits.<\/p>\n
Greenland, they added, could be that point.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n
<\/p>\nADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n
\u201cThere is a legally established European toolbox that can respond to economic blackmail with very sensitive measures, and we should now examine the use of these measures,\u201d said Klingbeil, who is also Germany\u2019s finance minister.<\/p>\n
There is a growing realization internally, one EU official said, that the bloc\u2019s current approach to the US is not going to get the desired results. But they see little chance of a muscular pivot.<\/p>\n
Meanwhile, the ECB last week noted that problems within the EU\u2019s own single market, touted as the bloc\u2019s biggest benefit, are actually creating higher trade barriers than the US \u2014 equivalent to levies of 67% for goods and 95% for services.<\/p>\n
The findings reflected a sentiment officials expressed: While von der Leyen is not to blame for Trump\u2019s erraticism, she hasn\u2019t done enough on the EU executive\u2019s core job to ease business within the single market.<\/p>\n
Yes, she is constrained by EU capitals that are frequently divided and at times blatantly obstructive. But she has also largely opted to stick with the bloc\u2019s consensus-based traditions, even as it increasingly becomes an obstacle to making quicker progress.<\/p>\n
\u201cToo often, excuses are made\u201d for the EU\u2019s plodding economic reforms, Draghi said in September. \u201cWe say it is simply how the EU is built. That a complex process with many actors must be respected. Sometimes inertia is even presented as respect for the rule of law. I think that is complacency.\u201d<\/p>\n
<\/p>\n