EU and India clinch trade pact amid US tariff war

What happened

The European Union and India Tuesday announced a free trade agreement that will slash tariffs on most goods over the next decade. The agreement will cover 2 billion people and “one-third of global trade,” Indian Prime Minister Narendra Modi said in New Delhi, standing alongside European Commission President Ursula von der Leyen and European Council President António Costa. Von der Leyen called it “the mother of all deals.”

Who said what

The EU and India “talked on and off for nearly 20 years about doing a trade deal,” Politico said, but it took President Donald Trump’s “tariff coercion and China’s export dominance to push them into finally achieving a breakthrough.” Their new “partnership extends beyond commerce,” The Associated Press said, as India and Europe “also agreed on a framework for deeper defense and security cooperation, and a separate pact aimed at easing mobility for skilled workers and students.”

The deal is “as much about geopolitics” as trade, sending a “message to Trump that global powers have started to look at ways to club together to protect themselves against his administration,” the BBC said. And the EU and India “are not alone in looking to hedge their bets when it comes to the U.S.” Earlier this month, the EU finalized a trade pact with the South American bloc Mercosur after 25 years of talks.

What next?

British Prime Minister Keir Starmer heads to China today “hoping to reinvigorate recently strained business ties,” following a trade-oriented visit to Beijing by Canadian Prime Minister Mark Carney, Reuters said. Carney is also planning a trip to India, where Starmer signed a trade deal with Modi in October. It will “likely take several months” before the EU-India agreement takes effect, the AP said.