Hit by Trump tariffs, nations race to forge new alliances

US President Donald Trump’s import tariffs have breathed life into dormant free trade talks across the globe and driven alliances at an unrivalled pace between partners seeking to offset lost exports to the United States.

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The European Commission's High Representative for Foreign Affairs Kaja Kallas and Commissioner for Trade Maros Sefcovic present EU-Mercosur and EU-Mexico trade agreements in Brussels last month.

(REUTERS FILE)

Since Trump's reelection last November, the European Union has struck three free trade agreements - with South American bloc Mercosur, Mexico and Indonesia - and has its sights on a fourth, with India, by the end of this year.

The EU is not alone. Mercosur has sealed a free trade deal with the four-nation European Free Trade Area and relaunched negotiations with Canada that were stalled in 2021.

India and New Zealand revived talks after a decade-long hiatus, while the United Arab Emirates signed three trade agreements in a single day in January.

Brussels has been clear it sees new alliances as part of its response to “unjustified” US tariffs of broadly 15 per cent on EU goods and to Chinese oversupply and export restrictions on critical mineral the EU needs for its green transition.

The new trade pacts may not fully compensate for losses in commerce with a more protectionist America - time will tell - but rival economies have been spurred into action nonetheless.