The European Union and India announced a landmark Free Trade Agreement on Tuesday. The two economies, which together represent about a quarter of the world’s population, spent nearly two decades haggling over the terms of the deal.
So what brought them together to finally ink what the EU has lauded as the “mother of all deals”?
Statements by European leaders suggest the self-proclaimed king of the deal, President Trump, and his tariffs-based trade policy over the last year, likely helped propel the two sides toward a final agreement.
And they’re not alone.
Many of the world’s major economies have raced to forge new bilateral agreements as doing business with the U.S. has become suddenly, and in many cases dramatically, more expensive and less predictable.
India and EU sign the “mother of all deals”
Indian Prime Minister Narendra Modi called the trade deal with the EU “historic,” arguing that it would “deepen the economic ties, create new opportunities … and strengthen the partnership” between the “world’s two largest democracies.”
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He said it would “make access to European markets easier for India’s farmers and small businesses” and boost his country’s manufacturing and services sectors.
The deal will see tariffs slashed across a wide range of products, including textiles, apparel, leather, footwear, gems and jewelry, handicrafts, engineering goods and automobiles. India will also cut tariffs on wine, beer and olive oil imported from the EU. Both economies will get unprecedented, preferential market access to each other’s products, their leaders said Tuesday.
Europe’s massive auto industry, as an example, will see current Indian tariffs on imported vehicles from the bloc slashed from as high as 110% to 10%.
“We did it, we delivered the mother of all deals,” European Commission President Ursula von der Leyen said at the event announcing the deal in New Delhi.
The free trade agreement, which will be formally signed later this year after it’s approved by the European Parliament and the bloc’s individual member states, will allow free trade of goods between India and the 27 EU nations.
Together, India and the EU account for 25% of global GDP and about a third of global trade, according to a statement from the Indian government. The EU is already one of India’s biggest economic partners, with bilateral trade worth around $137 billion in 2024-25. By comparison, bilateral U.S.-India trade in that period totalled around $132 billion.
Separately, India and the EU also agreed on a mobility framework that will ease travel and work restrictions for skilled professionals.
U.K. looking to China for “order and organization” amid Trump’s “disruption”?
British Prime Minister Keir Starmer landed in China Tuesday, beginning the first visit by a U.K. leader to the country since 2018.
“For years, our approach to China has been dogged by inconsistency – blowing hot and cold, from Golden Age to Ice Age. But like it or not, China matters for the U.K. As one of the world’s biggest economic players, a strategic and consistent relationship with them is firmly in our national interest,” Starmer said in a statement before leaving for Beijing. “That does not mean turning a blind eye to the challenges they pose – but engaging even where we disagree. This is what our allies do, and what I will do: delivering for the public, putting more money in their pockets and keeping them safe through pragmatic, consistent co-operation abroad.”
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Starmer, who traveled with a delegation of representatives from leading U.K. businesses including HSBC and Jaguar Land Rover, was expected to meet President Xi Jinping and Premier Li Qiang to discuss “trade, investment and national security,” according to a statement from the British government.
“In a time of growing global instability, where events abroad continue to rebound on people at home, the Prime Minister has promised to act in the U.K.’s national interest,” the government said.
Dr Yu Jie, a senior research fellow on China at Chatham House, told CBS News partner network BBC News that China also had incentives to forge closer ties with the U.K., potentially seeing it as a destination for investment that could bring “order and organization” amid the “disruption” caused by President Trump’s foreign policy.
Canada and China trade deal
Earlier this month, Canadian Prime Minister Mark Carney visited Beijing, becoming the first Canadian leader to visit China in nearly a decade.
Carney and Chinese President Xi Jinping announced a deal to lower tit-for-tat tariffs between the two nations on things like canola oil and electric vehicles.
Xi hailed the agreement as a “turnaround” in the relationship between China and Canada, the latter of which has been seeking to diversify its trade partnerships.
Xie Huanchi/Xinhua/Getty 
Canada’s largest trade partner is the United States, but that relationship is under increasing strain as a result of President Trump’s inconsistent tariff policy. It was an issue Carney alluded to during his visit, when asked if China was a more predictable and reliable partner to Canada than the United States.
“The one comparison I will give you with the United States, our relationship is … much more multifaceted, much deeper, much broader than it is with China,” Carney said. “But yes, in terms of the way that our relationship has progressed in recent months with China, it is more predictable, and you see results coming from that.”
President Trump reacted to the agreement by threating to impose 100% tariffs on Canadian imports to the U.S. if it is finalized.
“If Canada makes a deal with China, it will immediately be hit with a 100% Tariff against all Canadian goods and products coming into the U.S.A.,” he said in a post on his Truth Social platform.
Are Trump’s tariffs fueling a trade boom for China?
The push for bilateral deals comes as President Trump puts huge pressure on many of America’s longtime partners and allies, both economically and politically. Some analysts think that pressure is benefitting one of America’s biggest adversaries.
“Many countries previously have not been China-friendly are now kind of pivoting to China … because the United States is becoming a lot less predictable,” Aleksandar Tomic, an economics professor at Boston College, told the Reuters news agency. “The more the U.S. gets difficult to deal with, the more it opens up for China.”
“I think China has done a good job and rightly so to position itself as the reliable and stable trade partner,” Derrick Irwin, co-head of intrinsic emerging markets equity at Allspring Global Investments, told Reuters. “They basically said, look, you’ve got a massive trade partner in the U.S. that’s become a little more uncertain. We can offer predictability and certainty. And I think that’s very fair.”
Some experts also cautioned that growing distrust in the U.S. does not necessarily mean China will prove to be a reliable economic partner.
“Many of these countries harbor deep concerns about China’s approach to trade, its use of economic coercion, and unresolved maritime and historical disputes,” Patricia Kim, a foreign policy fellow at Washington-based Brookings Institution, told Reuters. “In the current moment, China may appear more restrained or pragmatic when compared with the Trump administration’s extreme rhetoric and actions. But Beijing’s actual behavior has not been especially reassuring.”
A “strong message,” but is the U.S. missing out?
Mr. Trump hit India with 50% tariffs last year – with half of that levy imposed to punish India for maintaining its Russian oil imports – amid hectic negotiations over a bilateral trade deal. The U.S. and India have said they’re close to finalizing a deal, but with lingering tension over India’s Russian energy purchases, no dates have been set.
“I think they [India and U.S.] are actually very close behind the scenes,” Mark Linscott, trade policy expert and senior advisor at the U.S. India Strategic Partnership Forum, told CBS News. “I think a few compromises on both sides will get them to an agreement.”
Mr. Trump has also imposed steep tariffs on European imports, though he backed down quickly from a threat to hit the bloc with even higher rates amid a standoff over Greenland.
European leaders were keen to point out that the free trade agreement with India showed a bloc open for business — with loosely veiled jabs at Mr. Trump’s policies.
Without mentioning the American leader by name, European Council President António Costa said the bilateral deal with India sent an “important political message to the world, that India and the EU believe more in trade agreements than in tariffs.”
Von der Leyen called the deal a “strong message that cooperation is the best answer to global challenges.”
In the last seven months, India has also signed major trade agreements with the U.K., Oman and New Zealand. The EU has also done a deal with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland.
But while Mr. Trump’s policies may be pushing other countries to forge deals beyond Washington, Linscott, who was a U.S. trade negotiator during Mr. Trump’s first term, said the U.S. has not been sidelined.
“If you look at the last 12 months, the country that has concluded the most number of trade deals is the United States. There are plenty of countries around the world who are still interested in doing deals with the U.S.,” he said.
He told CBS News that the spate of recent trade agreements is likely rooted in efforts “to diversify trade and secure supply chains” in the wake of the COVID-19 pandemic, when “it became clear how vulnerable those were.”