Explainer: How the European Union works and how it’s changing

The European Union (EU) is a complex organization formed by several European countries to promote economic growth and prevent conflicts. Its origins trace back to the aftermath of two major world wars, with France and Germany playing a leading role. The EU began with the pooling of coal and steel resources in 1952, which later expanded to include more countries and gained significant influence.

The EU is recognized for its global leadership in regulation, promoting trade while facing criticism for potential over-regulation. It has created deeper integration across Europe, standardizing currencies, and fostering closer ties among its member states. Some countries remain outside the euro and use their own currencies, while others, including Ukraine and Turkey, are in negotiations to join the EU.

The EU operates through three institutions: the European Commission, led by Ursula von der Leyen, proposes policies; the European Parliament, composed of elected representatives from member states, oversees these policies; and the European Council addresses political matters, such as negotiations with member states. Political scientist Edward Koning notes that the EU's structure can be confusing for its citizens, a challenge the organization has continually faced.

Proponents argue that the EU has contributed to peace, prosperity, and higher living standards across the continent by fostering a common labor market, harmonized regulations, and shared fiscal policies. The EU's market of 450 million consumers has also helped protect it from external pressures, such as those from the United States and China. However, critics argue that the EU has undermined national autonomy and made it easier for migrants to reach certain countries.

The European debt crisis in 2009 strained relationships within the EU, with member nations like Greece and Ireland facing severe consequences of EU-imposed policies, while others, like Germany and the Netherlands, felt pressured to subsidize others' spending. The EU's regulatory prowess, while effective in setting standards, can slow down business operations and increase costs.

In the age of U.S. President Donald Trump, the EU's role has evolved as it navigates balancing the interests of its member states with its own. The EU has engaged with Canada on trade and individual country-level trade negotiations, while delegating trade advocacy to member nations. The Trump administration has employed sanctions and threatened withdrawal from NATO, prompting the EU to strengthen its role in trade negotiations, weapon production, and defense systems.

The EU's Anti-Coercion Instrument, a potential "bazooka" to counterbalance American influence, has not been deployed but has been discussed. The EU is also exploring partnerships with trade blocs like the CPTPP to protect against economic coercion from the U.S. and China.