Good morning,
Signing off on a trade deal with India is a major coup for EU Commission chief Ursula von der Leyen. The agreement, which will be announced on Tuesday, brings to a close several decades of stop-start talks. By the standards of trade deals, it is not really that ambitious. Agriculture has been almost entirely kept out. So, too, have services. In many cases, tariffs, such as those on European cars, will still be high.
But it is symbolically huge. Trade with the world’s most populous country is only going to increase. Equally significant is the defence and security part of the agreement.
The EU-India pact has been badly received by the Trump administration which has imposed 50 percent tariffs on India, citing its cosy relations with China and Russia. Treasury secretary Scott Bessant says that the EU is ‘financing war against itself’ by striking an agreement with New Delhi. In fact, cleaving India away from relationships and closer to Europe was one of the commission’s main motivations.
In truth, the EU is stuck in a holding pattern with Washington. At the end of last week, the commission said that it would propose suspending for another six months a package of retaliatory trade measures against the US worth €93bn that would otherwise have taken effect on 7 February.
Throughout this near year-long dispute with the Trump administration there have threats and counterthreats of tariffs.
The suspended tariffs were prepared last May when the European Union was negotiating a trade deal with the United States, and were then put on hold for six months when Brussels and Washington agreed on a joint statement on trade in August 2025.
The August deal is also on hold.
Last week, Bernd Lange, the chair of the European Parliament’s trade committee, stated that the agreement between Trump and Von der Leyen was “on hold until further notice”.
Trump’s trade wars and military threats against Greenland have destroyed transatlantic trust. Only weeks ago, the commission was quietly urging the parliament to get the US trade deal approved as soon as possible. Now the reality is that it would struggle to get through parliament at all.
- Benjamin Fox, Africa editor
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