In the first face off of what could turn into an all-out trade war between the U.S. and the European Union, the Europeans blinked first.

European economies are already feeling the impacts of the 25% levy on global imports of steel and aluminum that went into force March 12. The European Union vowed to retaliate with around $30 billion worth of targeted tariffs on U.S. goods including a 50-percent markup on Bourbon and other American whiskey, starting April 1. Further EU taxes were set to start two weeks later.

In response, Trump said the strategy was “nasty,” and he threatened a 200% markup on prices for European alcohol in the U.S. Then, this week, Europe struck back by delaying the April 1 tariffs until at least April 15.

The reason, according to European Union trade spokesman Olof Gill, is to give time for “a constructive dialogue with the U.S. in order to seek a solution that avoids unnecessary harm to both economies.”

Wine producing countries were particularly worried about the 200-percent tariff threat and so it was no surprise that the implementation of the measures was reportedly pushed by France, Italy and Spain – not coincidentally, the three European countries that sell the most wine in the U.S. market.

The decision on tariffs came during an unusually high-profile meeting of the European council of leaders Thursday and Friday in Brussels and in the days after, scores of analysts were almost unanimous that a trade war would hurt Europe more than the U.S.

The European leaders did take more decisive stands in other areas related to the policies of the two-month-old Trump administration. That includes reiterating support for Ukraine and sending an additional $1 billion to help the country in its war against Russia. That is a stance that has not changed despite the unexpectedly harsh welcome for Ukrainian leader Volodymyr Zelensky at the White House last month.

Leaders also agreed to “intensify” the process toward Ukraine becoming a European Union member state. Despite Russia President Vladimir Putin’s intense opposition to that, they elected not to consider unfreezing $50 billion in Russian financial assets immobilized last year.

European Commission President Ursula von der Leyen also said she opposed the proposed U.S. ceasefire plan for Ukraine, arguing that such a move would only allow Russia to “regroup” before launching new attacks.

Probably most notably, the European states agreed to dramatically increase defense spending and to coordinate their security initiatives as the 27-nation bloc looks for ways to flex its geopolitical muscles even as the U.S. withdraws security guarantees Europe has enjoyed since the end of World War II.

“We will spend more on defense and we will spend it better,” von der Leyen said. “We have no choice.”

Apart from Europe’s at least temporary retreat on tariff policies and its renewed support for Ukraine under Zelensky and opposition to Putin’s Russia, the big takeaway from the Council of Europe meeting may be the difficult position some European leaders find themselves in as they seek to straddle the growing U.S.-Europe divide.

The best example of that may be Italy’s Giorgia Meloni, who supported Trump’s first term even when she was part of Italy’s political opposition (she had a prominent spot at CPAC in 2019, for example). As prime minister, she made a surprise trip to meet with Trump at Mar-a-Lago in January, more than two weeks before Trump’s inauguration (Trump called her "a fantastic woman"). The bond between Trump and Meloni had media calling the 48-year-old Italian Europe’s “Trump Whisperer.”

But Meloni is also committed to European priorities that sometimes clash with White House priorities. That includes strong support for the Ukrainian cause, a willingness to criticize Israel’s Benjamin Netanyahu, and the recognition that the cash-strapped Italian government cannot afford to spend dramatically more on its military (the country is under the NATO target of spending 2 percent of GDP on defense) and that any disruption of trade would hit Italy harder than it would most European economies.

That has put Meloni, likely Trump’s most important ally in Europe, in a tough spot, as France’s Le Monde (and many others) reported, leaving the Rome native “trapped in an awkward position on European defense and the trans-Atlantic crisis.”