Trump’s reaction to the EU-India free trade agreement
US President Donald Trump and Indian Prime Minister Narendra Modi in Washington DC on February 13, 2025.
Andrew Caballero-reynolds | Afp | Getty Images
The ink on the European Union and India’s historic trade agreement is not yet dry, but all eyes are now on how President Donald Trump will react to the free trade agreement, which is seen as a strategic hedge against the United States’ unstable trade policies and tariff threats.
agreementThe deal, approved early Tuesday, took almost two decades to agree and will see trading giants gradually reduce tariffs Eliminating the majority of each other’s imports, except for some essential products and sectors.
Trump has yet to publicly react to the EU-India deal, which was announced early Tuesday morning European time, but he and the White House are unlikely to be happy with the agreement. Treasury Secretary Scott Bessent has already criticized the EU for pursuing a trade deal with India.
“The United States has made far greater sacrifices than the Europeans. We put a 25% tariff on India to buy Russian oil. Guess what happened last week? The Europeans signed a trade agreement with India,” Bessent told ABC News on Sunday.
Indian Petroleum and Natural Gas Minister Hardeep Singh Puri told CNBC on Tuesday that he expects US-India relations to remain positive and a trade deal to be completed soon.
“Relationship structure [between the U.S. and India] very strong. I’ll try to look on the bright side, I’m not a prophet, I don’t know when the trade deals will be signed, how long it will take… but everyone needs to calm down a bit,” Hardeep Singh Puri told CNBC’s Amitoj Singh.
He stated that India supports the multilateral trading system and this is clearly seen in the latest agreement with the EU: “If you were to make a statement that the multilateral trading system, that is, the global economy, is facing difficulties, then I do not think anyone would want to object to that assessment. On the Indian side, there are several sectors that are looking for a developed European market,” he said.
How will Trump react?
While Indian Prime Minister Narendra Modi had earlier praised the “landmark” free trade agreement, both he and European Commission President Ursula von der Leyen described it as the “mother of all agreements”. Von der Leyen said that the agreement will allow the two sides to develop their strategic relations.
Both leaders will speak at the EU-India summit later Tuesday and are likely to praise a deal that eases trade barriers and lowers tariffs at a time when their export-oriented industries face punitive tariffs from the United States
The White House imposed a 15 percent tariff on EU imports last year despite agreeing on a trade deal Along with the bloc, goods from India also face a further 50 percent penalty, in part due to ongoing oil purchases from Russia.
Hosuk Lee-Makiyama, Director of the European Center for International Political Economy, said the EU-India trade deal is one of the best deals available for the two sides, which have traditionally been protectionist when it comes to strategic sectors of their economies such as agriculture and automobiles.
“This is a deal they can do that will have a positive impact, while the U.S. and China will remain closed while new market openings continue. So in that respect, this is probably one of the best deals they can make right now,” Lee-Makiyama told CNBC on Tuesday. he said.
The official added that both India and the EU had reasons to reach an agreement despite the inevitable anger it could create in Washington.
“But there is an important difference [with this landmark deal]”However, this means that India has actually failed to secure an agreement with the US.” “EU trade ministers, on the other hand, are now getting used to the fact that a new tariff threat comes from Washington every week, and of course their shells are getting a little thicker.” [each time]” he told CNBC’s “Europe Early Edition.”
Needs are mandatory
At a time when the United States’ commitment to its European allies appears extremely vulnerable, there will undoubtedly be some wariness in Europe about upsetting the United States, especially when it comes to the principle of collective defense that is the bedrock principle of the NATO military alliance.
David McAllister, member The member of the European Parliament and chairman of the foreign affairs committee outlined the balance the region must maintain between pursuing its own economic interests while maintaining good relations with Washington.
“Europe needs to become more sovereign. Europe needs to grow, and that means we need to be more economically competitive,” he told CNBC’s “Europe Early Edition” on Tuesday.
“We need to do much more for our own security and defense, but we also want to maintain our close transatlantic relationship with the United States… but that relationship needs to be based on mutual respect and trust,” he said.
