India has found itself at the centre of the European Union’s latest efforts to reshape its global trade strategy.
As relations with the United States become increasingly strained, the EU is seeking to build stronger ties with other major economies, and India has emerged as a key partner in this evolving landscape.
The EU’s move comes amid growing concerns in Brussels over what is seen as an irreversible deterioration in transatlantic ties.
Officials are particularly worried about the long-term impact of protectionist policies championed by former US President Donald Trump, which are still influencing the direction of US trade policy today.
The EU’s chief trade negotiator, Maroš Šefčovič, is set to visit Washington to push for a rollback of tariffs introduced by Trump on over €380 billion worth of EU exports.
While these discussions continue, the EU is simultaneously stepping up efforts to strike new free trade agreements with countries across Asia, the Middle East, and Latin America.
These efforts reflect the EU’s growing belief that it must look beyond Washington to safeguard its economic interests.
Despite having the largest network of trade agreements in the world—covering over 75 partners and involving more than €2 trillion in trade—the EU recognises the challenge of lessening its reliance on the US.
In 2023, the transatlantic trade relationship still accounted for €1.6 trillion in goods and services exchanged between the two economies.
European Commission President Ursula von der Leyen has reiterated the need to diversify partnerships, stating that the EU will focus on nations representing 87% of global trade—excluding the US.
In recent months, the EU has made notable progress in moving trade negotiations forward with India, the UAE, Malaysia, Indonesia and Thailand, among others. Talks with the UK have also gained momentum as the two sides explore new frameworks for post-Brexit relations.
These developments come at a time when some EU member states, particularly France, have historically slowed down trade negotiations due to domestic concerns, especially around agriculture.
However, the renewed urgency to protect European economic interests has pushed reluctant capitals to re-engage with Brussels’ trade agenda.
One of the most significant trade deals under consideration is the long-awaited agreement with Mercosur—a bloc that includes Brazil, Argentina, Paraguay and Uruguay.
After more than two decades of negotiation, the EU and Mercosur reached a political agreement in December. With Austria now backing the deal in light of Trump’s latest tariffs, the path to ratification appears more certain.
This agreement would create a combined market of 780 million people, offering European firms greater access to Latin America while reducing tariffs on EU goods.
Von der Leyen also announced the EU’s intention to engage more closely with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional trade bloc from Australia to Canada.
The CPTPP had initially included the United States, but Washington withdrew under Trump’s administration.
While the EU is cautiously exploring cooperation with China on matters such as electric vehicle supply chains and customs, this approach is controversial. Countries like Spain have expressed interest in deeper ties with Beijing.
However, many leaders remain sceptical, with French Prime Minister François Bayrou warning against relying on China, arguing it poses a long-term threat to European producers.
The urgency behind the EU’s global trade push has been further fuelled by Trump’s announcement of new tariffs. A 20% “reciprocal” tariff on nearly all EU exports has been delayed by 90 days, but a 10% levy remains in place.
Additional duties on steel, aluminium, cars, chips, and pharmaceutical products are also impacting EU exporters.
To address these challenges, the EU is working with partners to monitor and respond to trade diversions—particularly from China—as the global trade environment becomes increasingly unpredictable.
Von der Leyen and European Council President António Costa are expected to travel to Beijing in July for a summit to address trade cooperation.
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