EU, Australia seal trade deal as Western countries hedge against U.S. risks
European Union (EU) trade commissioner Maros Sefcovic, from left, European Commission president Ursula von der Leyen, Australian prime minister Anthony Albanese and Australian trade minister Don Farrell at a press conference at Parliament House in Canberra, Australia, on Tuesday, March 24, 2026.
Hilary Wardhaugh | Bloomberg | Getty Images
European Union and Australia A comprehensive trade deal was agreed on Tuesday; It was the latest move by U.S. allies to rethink their economic ties amid deepening global geopolitical uncertainty.
The deal, the result of almost eight years of talks, would remove most of the tariffs the two sides impose on each other’s goods and give the EU greater access to critical mineral resources from Australia.
Under the long-awaited trade deal, the EU is set to scrap around 98% of its duties on exports of Australian goods, including wine, dairy, wheat, barley and seafood. In return, Australia to remove more than 99 percent of tariffs EU goods, especially dairy products, motor vehicles and chemicals.
“We are sending a strong signal to the rest of the world that in turbulent times, what matters most is friendship and cooperation,” European Commission president Ursula von der Leyen said in a statement on the commission’s website on Tuesday. he said.
“The EU and Australia may be far apart geographically but we couldn’t be any closer in terms of how we see the world,” he added. “We are moving closer together with these dynamic new partnerships in security and defense as well as trade.”
European Commission leader von der Leyen met with Australian Prime Minister Anthony Albanese earlier this week to complete the negotiations that started in 2018.
Negotiations stalled in 2023 Some disagreements with Canberra The EU has pushed for better access and lower tariffs on Australia’s critical minerals, while seeking larger quotas for lamb and beef exports to Europe. Both sides later stepped up talks following higher US tariffs under the Trump administration.
EU exports to Australia are expected to increase by up to 33% over the next decade, with the value of exports rising to €17.7 billion ($20.5 billion) annually. The EU had a surplus of 28 billion Euros Goods trade with Australia In 2024.
The EU imports mineral and plant products mostly from Australia, while exporting machinery and appliances, transport equipment and chemicals to the Asia-Pacific country.
None of us are immune to the geopolitical and economic shocks that the war in Iran has brought to our people.
Ursula von der Leyen
European Commission chief
Almost all Australian exports of manufactured goods and mineral resources will face zero import tariffs into the European Union. Investment from the bloc, Australia’s second-largest source of foreign investment in 2024, could grow by more than 87%, according to a government statement.
The agreement includes a dual safeguard mechanism that allows the EU to take measures to protect sensitive European products and manufacturers if an increase in imports from Australia harms the EU market.
Critical mineral resources
The European bloc will also secure supplies from Australia of some critical raw materials (CRMs), such as aluminium, lithium and manganese, which are vital for the EU’s overall economic security.
“CRM trade is currently easily disrupted by sudden economic or geopolitical shocks,” the EU said in its statement, stressing that partnerships with “reliable partners” are essential to maintain supply.
The bloc is especially looking for ways to reduce dependence on China Critical minerals, for which Beijing imposes export controls on some important resources.
On the security front, Australia and the European bloc have committed to strengthening cooperation in areas such as crisis management, maritime security and disruptive technologies, including artificial intelligence.
Diversification of commercial ties
European Union steps up pressure It made new agreements with its commercial partners last year in order to diversify its economic relations, defense and military security partnerships, which are under threat as the USA becomes increasingly unreliable.
US President Donald Trump’s campaign to target even US allies with heavy tariffs, upend the rules-based trading system and launch surprise attacks on Venezuela and Iran without prior notice to major allies has strained ties between Washington and many of its traditional partners.
Leaders of Western nations, particularly Canadian Prime Minister Mark Carney, have called on the so-called middle powers to work together to counter the rise of unilateralism among global superpowers.
“Trump’s unemotional and often hostile foreign policy toward traditional U.S. allies has turned his deep ties to the United States, long seen as a source of strength, into a vulnerability,” James Lindsay, a senior fellow at the Council on Foreign Relations, wrote in a Feb. 18 memo.
Speaking in the Australian Parliament about the ongoing conflict in the Middle East, which has caused global oil prices to rise, von der Leyen “None of us is immune to the geopolitical and economic shocks that the war in Iran brings to our people,” he said Tuesday. he said.
The regional war has reignited fears of a contraction in energy supplies and an inflation shock in Europe, which is heavily dependent on imported crude oil and natural gas.
But Lindsay warned: Protection efforts of US allies Their economic impact on America will not be “solved overnight” because the ties between Washington and its partners are too deep to be easily reset and their heavy dependence on US advanced technology.
“Reversing this dependence will take years and will require far-reaching regulatory changes, significant investment, talent development and close cooperation between governments that, for now, continue to put national interests ahead of EU-wide interests,” Lindsay said. he said.
The European bloc reached a trade deal with India earlier this year that would eliminate or reduce tariffs on more than 90% of goods traded between the two countries. concluded negotiations We signed a trade agreement with Indonesia last year.
The trade agreement with Mercosur, the South American bloc that includes Argentina, Brazil, Uruguay and Paraguay, is expected to come into force in 2017. Temporary basis as of May, The European Commission said on Monday:.
