From Mercosur and deals with India and Australia to ongoing tensions with the U.S. and China, the EU is reshaping its trade strategy. This policy report examines the agreements already reached and the challenges defining the future of European trade.
Halfway through 2026, the year is proving to be a turning point for the European Union's trade relations.
Donald Trump's unpredictability and the lopsided deal the EU struck — imposing 15% tariffs on most European exports to the U.S. — made clear that the bloc could no longer rely on its closest commercial partner and forced it to diversify its trade strategy more rapidly.
Since last year, the European Commission has intensified efforts to secure trade agreements with partners including Indonesia, South Africa, India, Australia and Mexico. In the meantime, the Mercosur agreement entered into force provisionally.
The first section of this policy report focuses on the EU's key recent agreements. Economists Orsola Costantini and Alex Izurieta examine the Mercosur deal, Bruegel fellow Ignacio García Bercero analyzes the geopolitical significance of the EU-India FTA, and MEP Seán Kelly explains why the EU-Australia accord did not trigger farmers' protests.
Two articles inspect the EU's relationship with the United States. Federica Di Sario unpacks the agreement reached between Trump and Ursula von der Leyen last year, while MEP Brando Benifei highlights the European Parliament's essential role in placing limits on Washington’s trade weaponization.
The second half of the report focuses on the future of European trade. The European Policy Centre's Jannike Wachowiak explains what lessons the U.K. can draw from the new EU-Switzerland arrangement, while Di Sario explores Brussels' strategy to shield its economy from Chinese pressure.
At the center of the policy report, an interview with former Trade Commissioner Cecilia Malmström bridges the EU's latest agreements and future strategy.
— Francesco Puggioni, Opinion & Policy Report Editor