EU eyes new trade deals in the face of Trump tariffs

Mercosur and EU leaders participate in the signing of the historic agreement. AFP Over the past 12 months, countries around the world have panicked over tariffs or trade war threats from the United States. President Donald Trump’s whims have added instability and a sense of urgency to markets. 🗒️Do you have any reporting suggestions? Send to g1 The old global commercial order disappeared, giving way to new commercial arrangements between countries. There is a lot of talk in the headlines about China, but the US’s neighbors and largest trading partners, Mexico and Canada, were not spared. Across the Atlantic, the European Union has also been through a rollercoaster of tariffs and is questioning long-standing partnerships. The contempt that Trump showed for European partners at the World Economic Forum in Davos raised another strong warning. The image of a reliable trading partner To counterbalance US hostility and show that the bloc is a reliable trading partner and an alternative to the United States, the EU has been trying to close deals that have been in the works for a long time. But trade agreements are notoriously complex and take time to enter into force, even with political will. On January 17, European Commission President Ursula von der Leyen went to Asunción, Paraguay, to sign the free trade agreement between the EU and Mercosur. The agreement between the 27 members of the European bloc and Argentina, Brazil, Paraguay and Uruguay covers a market of 700 million people. Once in place, it will be one of the largest free trade zones in the world. “We are sending a very clear message to the world that Mercosur and European Union countries are in favor of low tariffs, smooth trade, higher quality and better prices for our consumers,” EU Trade Commissioner Maros Sefcovic told DW after the signing. But just four days later, the European Parliament suspended the agreement by voting for a long review process by the Court of Justice of the European Union (CJEU). Even if parts of the deal are provisionally enacted, the decision by European parliamentarians is a major blow to the EU’s trade aspirations and creates the risk that South American partners will withdraw from the deal in protest. New attempt in India The president of the European Commission, Ursula von der Leyen, appears to have had better luck at the EU-India summit this Tuesday (27), in New Delhi. The two sides finalized a historic trade deal after nearly two decades of on-and-off negotiations that began in 2007, halted in 2013 and resumed in 2022. The agreement will allow India to open its vast and protected market, the most populous in the world, to free trade with the EU, already its biggest trading partner. This pact covers a market of 2 billion people and a quarter of the global Gross Domestic Product (GDP). The agreement envisages eliminating or reducing tariffs on 96.6% of EU goods exports, an opening that will save European companies around 4 billion euros annually in import taxes and allow them to double product exports to the Asian giant by the year 2032. “People around the world are calling this the ‘mother of all agreements'”, boasted Indian Prime Minister Narendra Modi. The EU takes its commitments seriously As the world’s second largest import market, shouldn’t the European Union be a highly coveted partner? Researcher Peter Chase, from the Brussels office of the American think tank German Marshall Fund, told DW that many countries see the EU as more stable and trustworthy than the United States. “The EU is a good negotiating partner because it takes seriously the commitments it makes in its trade agreements,” says Chase. “And it actually wants to build new trade relations with many countries.” Still, long deadlines and complicated ratification rules can get in the way. Political interests can also create obstacles, said Chase, whose work focuses on the European Union’s economic relations with third countries. The Mercosur-EU agreement is an example of how a minority can apply pressure and delay progress. This minority is led by France, which is mainly concerned about the impact of competition from foreign products on French agriculture. EU accumulates agreements The EU already has preferential trade agreements with 76 countries and has shown renewed interest in joining the so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade bloc of 12 nations from Asia and America that replaced the Trans-Pacific Partnership (TPP) after the departure of the United States. To date, the United Kingdom is the only European member. In 2025, the European Union managed to negotiate an update to its trade agreement with Mexico and finalized negotiations for a trade and investment agreement with Indonesia. Agreements with Malaysia, the Philippines and the United Arab Emirates are in the works. Furthermore, the EU-UK Trade and Cooperation Agreement will be reviewed this year. This will be the first full review of the treaty since it came into force in 2021. While the audit is only intended to review implementation, there is hope that it could help improve a tense relationship and serve as a springboard for closer cooperation. And the WTO? Chase assesses that there is something more urgent for the EU than another trade agreement: the revitalization of the World Trade Organization (WTO). Although trade liberalization is a positive thing, what the world needs is the reestablishment of the rule of law, he says. “Only the EU can help build the coalition of countries needed to do this,” says Chase, which would make it possible to address “the failure to meet commitments made by the United States and China’s long-standing refusal to fulfill the promises it made when it joined.” See the videos that are trending on g1

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