They are Trump

The European Union and India announced a historic free trade agreement on Tuesday. The two economies, which together account for about a quarter of the world’s population, spent nearly two decades haggling over the terms of the deal.

So what led them to finally sign what the EU has hailed as the “mother of all agreements”?

Statements from European leaders suggest that self-proclaimed deal king President Trump and his tariff-based trade policy over the past year likely helped push the two sides toward a final agreement.

And they are not alone.

Many of the world’s major economies have rushed to forge new bilateral agreements as doing business with the United States has become suddenly, and in many cases dramatically, more expensive and less predictable.

India and the EU sign the “mother of all agreement”

Indian Prime Minister Narendra Modi called the trade deal with the EU “historic,” arguing that it would “deepen economic ties, create new opportunities… and strengthen the partnership” between the “world’s two largest democracies.”

He said it would “facilitate access to European markets for Indian farmers and small businesses” and boost his country’s manufacturing and service sectors.

The agreement will see a drastic reduction in tariffs on a wide range of products, including textiles, clothing, leather, footwear, gems and jewelry, handicrafts, engineering goods and automobiles. India will also reduce tariffs on wine, beer and olive oil imported from the EU. Both economies will gain unprecedented preferential market access for each other’s products, their leaders said Tuesday.

Europe’s huge car industry, for example, will see current Indian tariffs on vehicles imported from the bloc reduced from 110% to 10%.

“We achieved it, we achieved the best of all agreements,” European Commission President Ursula von der Leyen said at the event announcing the deal in New Delhi.

The free trade agreement, which will be formally signed later this year after it is approved by the European Parliament and the bloc’s individual member states, will allow free trade in goods between India and the 27 EU nations.

Together, India and the EU account for 25% of global GDP and about a third of global trade, according to a statement from the Indian government. The EU is already one of India’s largest economic partners, with bilateral trade worth around $137 billion in 2024-25. By comparison, bilateral trade between the United States and India in that period amounted to about $132 billion.

Separately, India and the EU also agreed on a mobility framework that will ease travel and work restrictions for skilled professionals.

Is Britain looking to China for “order and organization” amid Trump’s “disruption”?

British Prime Minister Keir Starmer landed in China on Tuesday, beginning the first visit by a UK leader to the country since 2018.

“For years, our approach to China has been marred by inconsistency: hot and cold winds, from the Golden Age to the Ice Age. But like it or not, China is important to the UK. As one of the world’s largest economic players, a strategic and consistent relationship with them is firmly in our national interest,” Starmer said in a statement before leaving for Beijing. “That doesn’t mean turning a blind eye to the challenges they pose, but engaging even when we disagree. This is what our allies do, and what I will do: deliver for the public, put more money in their pockets, and keep them safe through pragmatic and consistent cooperation abroad.”

Starmer, who traveled with a delegation of representatives from leading UK companies including HSBC and Jaguar Land Rover, was expected to meet President Xi Jinping and Premier Li Qiang to discuss “trade, investment and national security”, according to a British government statement.

“At a time of growing global instability, where events abroad continue to impact people at home, the Prime Minister has promised to act in the UK’s national interest,” the government said.

Dr Yu Jie, senior China researcher at Chatham House, told News themezone partner BBC News that China also had incentives to forge closer ties with the UK, potentially seeing it as a destination for investments that could bring “order and organisation” amid the “disruption” caused by President Trump’s foreign policy.

Canada-China trade agreement

Earlier this month, Canadian Prime Minister Mark Carney visited Beijing, becoming the first Canadian leader to visit China in nearly a decade.

Carney and Chinese President Xi Jinping announced an agreement to reduce reciprocal tariffs between the two nations on things like canola oil and electric vehicles.

Xi hailed the deal as a “change” in the relationship between China and Canada, the latter of which has been seeking to diversify its trade partnerships.

Canada’s largest trading partner is the United States, but that relationship is increasingly strained as a result of President Trump’s inconsistent tariff policy. It was a topic Carney alluded to during his visit, when asked if China was a more predictable and reliable partner for Canada than the United States.

“The only comparison I will make to the United States is that our relationship is … much more multifaceted, much deeper, much broader than with China,” Carney said. “But yes, in terms of the way our relationship has progressed in the last few months with China, it is more predictable, and you see results from that.”

President Trump reacted to the agreement by saying threatening to impose 100% tariffs on Canadian imports to the US if finalized.

“If Canada reaches an agreement with China, it will immediately be hit with a 100% tariff against all Canadian goods and products entering the United States,” he said in a post on his Truth Social platform.

Are Trump’s tariffs fueling a trade boom for China?

The push for bilateral agreements comes at a time when President Trump is putting enormous pressure on many of the United States’ long-standing partners and allies, both economically and politically. Some analysts think the pressure is benefiting one of the United States’ biggest adversaries.

“Many countries that previously had not been friendly to China are now turning toward China… because the United States is becoming much less predictable,” Aleksandar Tomic, an economics professor at Boston College, told Reuters news agency. “The more difficult it becomes to deal with the United States, the more it opens up to China.”

“I think China has done a good job, and rightly so, of positioning itself as a reliable and stable trading partner,” Derrick Irwin, co-head of emerging markets intrinsic equities at Allspring Global Investments, told Reuters. “They basically said, look, you have a huge trading partner in the United States that has become a little more uncertain. We can offer predictability and certainty. And I think that’s very fair.”

Some experts also warned that growing distrust in the United States does not necessarily mean that China will prove to be a reliable economic partner.

“Many of these countries harbor deep concerns about China’s approach to trade, its use of economic coercion, and unresolved historical and maritime disputes,” Patricia Kim, a foreign policy fellow at the Washington-based Brookings Institution, told Reuters. “At the current moment, China may seem more restrained or pragmatic compared to the Trump administration’s extreme rhetoric and actions. But Beijing’s actual behavior has not been especially reassuring.”

A “strong message,” but is the United States missing it?

Trump hit India with 50% tariffs last year (half of that tax was imposed to punish India for maintaining its imports of Russian oil) amid hectic negotiations over a bilateral trade deal. The United States and India have said they are close to finalizing a deal, but because of lingering tension over India’s purchases of Russian energy, no dates have been set.

“I think they [India and U.S.] “They’re actually very close behind the scenes,” Mark Linscott, a trade policy expert and senior advisor to the US-India Strategic Partnership Forum, told News themezone. “I think some compromises on both sides will lead to an agreement.”

Although Trump has also imposed heavy tariffs on European imports. backed away quickly of a threat to hit the bloc with even higher rates amid a standoff over Greenland.

European leaders were keen to point out that the free trade deal with India showed a bloc open for business, with thinly veiled attacks on Trump’s policies.

Without mentioning the American leader by name, European Council President António Costa said the bilateral deal with India sent an “important political message to the world: India and the EU believe more in trade deals than in tariffs.”

Von der Leyen called the agreement a “strong message that cooperation is the best response to global challenges.”

In the last seven months, India has also signed major trade deals with the United Kingdom, Oman and New Zealand. The EU has also reached an agreement with the South American bloc Mercosur, following last year’s agreements with Indonesia, Mexico and Switzerland.

But while Trump’s policies may be pushing other countries to forge deals beyond Washington, Linscott, who was a U.S. trade negotiator during Trump’s first term, said the United States has not been sidelined.

“If you look at the last 12 months, the country that has closed the largest number of deals The commercial ones are the United States. “There are many countries around the world that are still interested in closing agreements with the United States,” he said.

He told News themezone that the flurry of recent trade deals likely stems from efforts “to diversify trade and secure supply chains” in the wake of the COVID-19 pandemic, when “it became clear how vulnerable they were.”