Import taxes imposed by US President Donald Trump have rekindled stalled free trade negotiations around the world and accelerated alliance formation amongst nations looking to make up for lost exports to the US.
The European Union has signed three free trade deals since Trump's reelection in November: one with Mexico, Indonesia, and the South American group Mercosur. By the end of this year, it hopes to sign a fourth, with India.
The EU is not by itself. In addition to resuming talks with Canada that had stalled in 2021, Mercosur has signed a free trade agreement with the four nation European Free Trade Area.In January, the United Arab Emirates inked three trade deals in one day, and India and New Zealand resumed negotiations after a ten year break.
In reaction to "unjustified" US tariffs of about 15% on EU exports, as well as to Chinese oversupply and export restrictions on vital minerals the EU needs for its green transition, Brussels has made it clear that it views new alliances as part of its strategy.
Rival economies have been prompted to act even if the new trade agreements might not completely make up for losses in trade with a more protective America.
EU trade head Maros Sefcovic told lawmakers last month that the US, which accounted for 17% of EU trade last year, was "not the only game in town" in a debate concerning the one sided EU US tariff agreement reached at the end of July.
"The remaining 83% must likewise be taken care of. That entails keeping up our efforts to broaden our relationships," he stated.
Countries who were previously hesitant to open their markets, such as France and India, have heeded the message and appear to have softened their resistance to the EU Mercosur agreement.
Ngozi Okonjo-Iweala, the director-general of the World Trade Organization, has also praised the trend, provided that the agreements comply with WTO regulations.
"Members are negotiating additional agreements with one another, which supports the WTO and diversifies trade.
Since the majority of these agreements are constructed on our platform, it is not in competition," she stated last month.
