A new trade deal between India and Europe is just the latest pact announced in less than a month’s time that doesn’t involve the United States. Long-delayed European plans for increasing trade with a bloc of South American nations also took a step forward, as has a limited trade deal between Canada and China to cut tariffs on electric vehicles and canola oil.
But these new agreements have also shown some of the challenges in global efforts to forge a trading system that circumvents the US.
European Commission President Ursula von der Leyen on Tuesday called the EU-India pact “the mother of all deals” to create a free trade zone of 2 billion people between India and Europe.
“This is only the beginning,” von der Leyen wrote on X.
“I think … you could see an increasing number of alliances between other countries around the world as we get used to this kind of multifaceted world where economies can’t be completely dependent on the US anymore,” said Seema Shah, Principal Asset Management chief global strategist, Tuesday morning on Yahoo Finance.
But that multifaceted world is not without complications. Europe’s deal with Latin America is being delayed by a legal review, and the China-Canada deal has drawn a furious response from President Trump.
President Donald Trump speaks with reporters before boarding Marine One on South Lawn of the White House on Tuesday in Washington. (AP Photo/Evan Vucci) ·ASSOCIATED PRESS
Throughout 2025, global trade watchers were highly focused on US-centric dealmaking, with the Trump administration engaged with multiple countries simultaneously and announcing multiple agreements amid rapid-fire tariff threats.
Read more: How Trump’s tariffs affect your money
US-focused trade talks continue — US Trade Representative Jamieson Greer was recently in Davos for talks, and Trump is set for a high-profile trip to China in April — but the president has lately been more likely to throw doubt on past trade deals than announce new ones.
On Monday night, he posted on Truth Social that “South Korea’s Legislature is not living up to” its recent trade deal with the US. In response, Trump threatened to increase reciprocal tariffs on South Korea from 15% to 25%.
By Tuesday, before leaving for a trip to Iowa, Trump seemed to downplay the chances of a permanent rupture with South Korea, telling reporters, “We’ll work something out.”
The deal announced this week between Europe and India was immediately seen as a rebuke to the White House and one that could have significant consequences in trade between India and Europe.
India has agreed to open its market to European cars, and both parties have agreed to eliminate or cut tariffs on over 95% of their shipments, according to summaries from each. Indian Prime Minister Narendra Modi called it the nation’s “biggest and most historic free trade agreement.”
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Indian Prime Minister Narendra Modi, center, President of the European Council, Mr. Antonio Luis Santos da Costa and the President of the European Commission, Ursula von der Leyen in New Delhi on January 27. (Press Information Bureau (PIB)/Anadolu via Getty Images) ·Anadolu via Getty Images
In an analysis, Capital Economics agreed that the consequences could be vast, writing that the deal — India’s fourth in recent months with various trading partners — “shouldn’t be underplayed.”
Even as certain goods are excluded, the analysts wrote, a variety of sectors from textiles to chemicals stand to quickly benefit if the deal is enacted, which “will lay the groundwork for faster medium-term growth.”
The US, meanwhile, has a 50% tariff rate on many Indian products as the two nations have seen their talks on a deal stall.
Other trade efforts announced in recent months have run into challenges that underline how a global realignment of trade will be bumpy and take time at the very least.
The landmark pact between Europe and a South American trade bloc known as Mercosur has been the subject of talks for decades and saw a breakthrough earlier this month.
The agreement aims to connect Europe and four Latin American countries in a new trade zone that will cover more than 700 million people, but it quickly hit a significant snag when the European Parliament voted last week to refer the deal to the European Court of Justice, a move that could delay implementation by years.
The European Commission responded with a statement that the delay could jeopardize Europe’s efforts to be “a reliable and predictable trading partner.”
Europe’s deal with India is expected to face a similar vote in the weeks ahead, but Capital Economics noted that “by keeping politically-sensitive areas such as agriculture off the table, the India-EU deal has been given a greater chance of being ratified.”
Canadian Prime Minister Mark Carney and Chinese President Xi Jinping meet at the Great Hall of the People in Beijing on Jan. 16. (Xie Huanchi/Xinhua via Getty Images) ·Xinhua News Agency via Getty Images
The limited trade deal between Canada and China to cut tariffs on electric vehicles and canola oil was also a notable breakthrough between those two countries.
But the US, of course, remains Canada’s largest trading partner by far, and a furious response from the White House led Canadian Prime Minister Mark Carney to downplay going significantly further with China.
After Trump threatened 100% duties “if Canada makes a deal with China,” Carney was quick to answer that he has “no intention” of entering into a broader free trade deal. He described this month’s pact as an effort “to rectify some issues that developed in the last couple of years.”
Trump didn’t immediately respond Tuesday to the Europe-India pact but has offered a flurry of threats in recent months that markets have become more and more willing to look past.
In addition to Canada and South Korea, Trump has threatened new tariffs over Iran and Greenland but has yet to follow through on any of them (with the threats over Greenland now formally withdrawn).
An analysis from Bloomberg Economics of 49 tariff threats from Trump since his election victory finds that he has actually carried out only about 1 in 4 of them.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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