Global Trade Dynamics: The World Looks Beyond the US; India-EU FTA Highlights the Shift

New Delhi: The world is increasingly seeking alternative trade routes beyond the United States, and the recently finalized India-European Union Free Trade Agreement (FTA) is a prime example. Policies pursued by US President Donald Trump have isolated America in global trade, eroding trust among allies and creating disruptions in supply chains.

Trump’s approach—including high tariffs, withdrawal from international organizations, and transactional foreign policy—has strained relationships with traditional allies. This has disrupted global supply chains and weakened America’s international influence.

Allies Moving Away
Even staunch allies such as the European Union have shown signs of distancing themselves. India, for instance, continues to face tariffs of up to 50% imposed under what it considers “unfair” US trade practices. Trump’s transactional diplomacy has also complicated collaboration with Europe on issues such as countering China’s growing influence.

The US has withdrawn from more than 60 multilateral agreements and organizations, reducing its role in global governance, including in areas of environmental protection, human rights, and NATO cooperation.

The World Finds New Paths
Many countries—especially small and medium-sized nations—prefer not to take sides between the US and China. They aim to avoid becoming “client states” of any single superpower. Instead, they are forming coalitions with like-minded countries to strengthen their bargaining power and safeguard their interests.

Amid this shift, India has demonstrated strategic independence. Despite strong ties with the US, India did not rush into a trade deal and prioritized its own interests, enhancing its global image as a sovereign and pragmatic partner.

India-EU FTA: A Blow to Trump’s Policies
The India-EU FTA also challenges Trump’s “America First” tariff strategy. Tariffs and trade threats imposed by the US on both India and the EU prompted both parties to diversify their supply chains and reduce reliance on America. The FTA, finalized after 18 years of negotiation, accelerates a multipolar trade structure, strengthens India-EU cooperation in the Indo-Pacific and Global South, and serves as a strategic counter to unpredictable US policies—potentially weakening America’s global clout.