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Trump-Era Uncertainty Lingers: EU-India Deal Quietly Seeks To Redraw Global Trade Map Without US

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by Tyler Durden
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Update(1620ET): EU officials have describe the new EU-India agreement, after many years of negotiations, as one of the most ambitious trade pacts the bloc has ever negotiated, significantly lowering India's historically high tariff barriers. Brussels estimates tariffs will be eliminated or reduced on nearly all EU exports to India, while Indian goods gain preferential access to European markets. Also, as we highlighted below there will be a one-way tech migration track into Europe as a result, but few are highlighting this aspect.

The agreement spans key sectors including manufacturing, machinery, chemicals, pharmaceuticals, autos, and select agricultural products, with tariff cuts phased in over several years rather than immediate removal. Sensitive sectors on both sides are excluded, ostensibly to protect domestic producers.

Beyond trade, the deal is positioned as a geopolitical signal: the EU is diversifying supply chains and reducing reliance on a tariff-heavy, increasingly unilateral global order (read: Trump) , while India strengthens ties with Europe amid "shifting" - to put it delicately - Washington trade priorities.

We would like to bring to your attention the bellow interview segment - the initial take of Managing Director of This Is Dubai Michael Jabri-Pickett:

It is the nuts and bolts... but for the commentators amongst us what we find are the broad strokes... and I think that there's an awful lot of nations and blocs looking at the unpredictability vs. the stability... America however,... there are decision that are being made without America. We had Canada and China, we have the British Prime Minsiter who's also going to China, we have this deal which has been 20 years in the making, and now you have a combined 25% of global trade now because of these 27 countries and India (and their 1.4 billion people)... and it's changing the entire dynamics because markets and CEO's love stability.

And the trouble that Donald Trump has created is not just for Americans today perhaps, or for even Americans in the next 4 or 5 years, it's for a generation or two. Because the fear is not just that Donald Trump has done this, it's that the next person could come in and be equally unpredictable in a completely different way. And then the person after that, the same thing. And so you would probably need a run of two or three presidents to be consistent and stable for the world the recognize 'oh America is acting the way we would expect them to act.'

* * *

The newly signed India-European Union free trade agreement is being hailed as "the mother of all deals" - as it follows nearly two decades of intermittent negotiations, also after President Trump slapped India with 50% tariffs last year in part for continuing to buy Russian oil, and as Washington pressures Europe and Denmark particularly over Greenland.

The deal is expected to double EU goods exports to India by 2032, by eliminating or at least sharply reducing tariffs on 96.6% of the value of EU exports. "This agreement will bring major opportunities for the people of India and Europe," Prime Minister Narendra Modi said Tuesday. And European Commission President President Ursula von der Leyen, who was in New Delhi on Monday as an honorary guest for India's Republic Day and its annual military parade, said that "Europe and India are making history today."

via X/Von der Leyen

She further wrote on X: "We have created a free-trade zone of two billion people, with both sides set to benefit. We will grow our strategic relationship to be even stronger." European Council President Antonio Costa was also present.

Indeed in terms of geographic scope, the agreement spans a population of roughly 2 billion people (between India and the 27-member bloc) and creates a combined market valued at nearly $27 trillion, accounting for about 25% of global GDP, according to European sources.

What's in it? Below are the main highlights:

  • Will phase out tariffs on most EU exports of chemicals, machinery, and electrical equipment, along with aircraft and spacecraft, following staged reductions.

  • Tariffs on motor vehicles, currently as high as 110%, will be slashed to 10% under a quota of 250,000 vehicles - a cap that is six times larger than the 37,000-unit quota India granted the UK under a deal signed last July.

  • India will also lower tariffs on EU wine, beer, and olive oil.

  • Brussels said the deal is expected to boost investment flows, improve access to EU markets, and deepen supply-chain integration between the two sides.

  • New Delhi said nearly all Indian exports will receive "preferential access" to the EU, with textiles, leather goods, marine products, handicrafts, gems, and jewelery seeing tariffs reduced or eliminated.

  • Commodities such as tea, coffee, spices, and processed foods will also benefit, though India said it has "prudently safeguarded sensitive sectors," including dairy, cereals, poultry, soy meal, and certain fruits and vegetables, to balance export growth with domestic priorities.

  • India and the EU also agreed to a mobility framework that will temporarily ease restrictions on professional travel between the two markets.

While Brussels and New Delhi are busy celebrating, all eyes are on how the Trump White House will react, given the agreement is widely viewed as strategic hedge against Trump's unpredictable and volatile trade policies and tariff threats, often unleashed in late night Truth Social posts.

The European Right might have something to say about a controversial aspect which is already being underreported...

And more criticism and details on migration which in reality is only going to be one-way...

On Sunday Treasury Secretary Scott Bessent gave the world a preview on what Trump is likely thinking as the EU forged ahead. "The US has made much bigger sacrifices than Europeans have. We have put 25% tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India," Bessent told ABC News.

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