Many in India and the European Union (EU) are celebrating the end to their 22-year-long struggle to achieve a sustainable trade agreement between them, but US President Donald Trump could be readying an ice-cold hosepipe to dampen their enthusiasm. The agreement has created a lucrative open trade area, combining nearly two billion people in a collective economy, standing at about $27 trillion now and rising. Yet, the EU, though a valuable partner worth having, is a weak political-economic entity teetering upon a divisive, poorly integrated and managed regional economy. It comprises 27 member states grappling, despite seven decades of institutional existence, with foundational issues such as whether they are genuine partners looking out for one another. Their behaviour is that of sovereign states warily guarding their independence against encroachment by the EU’s Executive Commission and pressure from self-styled leaders like France and Germany.
The attention of EU leaders is overwhelmed by struggles to maintain domestic political stability while extracting more funds from common budgets. Most are deeply suspicious of fellow members’ intentions and do not trust EU institutions, especially the commission. Many perceive it as an imperious bureaucratic behemoth prone to using its administrative and legal powers to coerce governments into obeying its regulations that often overrule national laws.
Currently, the EU’s numerous structural weaknesses are being rattled to the core by Trump’s disruptive onslaughts on the EU’s long-standing ways of doing things. He is also imposing huge new costs on each government to pay for its own defence and has converted customary US/EU relationships into mercenary ones. He has bluntly signalled that he sees EU governments, which are also members of NATO, less as allies and more as burdens on US taxpayers and its military and economic resources.
Consequently, he is determined to extricate America from the Ukraine quagmire that he, like many Americans, sees as another reckless European war that could burgeon into a Third World War. He is convinced that European powers will use NATO treaty obligations to force Americans to shed treasure and blood to protect them from their newest enemy, Russia. He blames Ukraine’s ongoing devastation on the incompetence of European governments, which failed to negotiate pathways to peace with Moscow, because they expected to free-ride on American sacrifice. They expected American funding, war materiel and soldiers to fight Russia, although Ukraine is their neighbour and the US is on a different continent. He has no bilateral quarrels with President Vladimir Putin and sees no imperative to fight Russia at the risk of nuclear warheads landing inside the US homeland. World War II was different since Nazi Germany would not have been able to devastate the American homeland imminently. This time, the conflict could go nuclear within a fortnight.
Delhi would do well to remember that, without US co-operation, it may not be able to score the 7 per cent and higher growth rates it needs to achieve Prime Minister Narendra Modi’s ambition of reaching developed country status by 2047
India’s trade deal with the EU, which both sides suddenly raced to in less than six months, was driven substantially by Trump’s tariff war on them. There is an urgent existential need for both to diversify export markets and supply chains while also reducing the dollar’s role. Exceptionally, the EU is offering extensive cooperation in defence, including technology transfers and production, because its leading members can no longer risk continuing as dependent military vassals of Washington. This apparent disrespect has set Trump’s hair on fire. He will not rest until Europeans pay a heavier price for his favour and India, the weaker economy compared with the higher-tech EU’s $22 trillion GDP, bends the knee to his demands.
Delhi would do well to remember that, without US co-operation, it may not be able to score the 7 per cent and higher growth rates it needs to achieve Prime Minister Narendra Modi’s ambition of reaching developed country status by 2047. European powers, though smiling fondly on India momentarily, can be expected to backpedal on Delhi if EU-US relations improve, especially after Putin attains his key war aims and negotiates peace within a new European security architecture.
Trump’s new remarkably disruptive defence strategy, published on 23 January 2026, does not mince words regarding Europe and his disdain for it. He has downgraded his European NATO allies from first priority to third, behind the Western Hemisphere in first place and China/ Indo-Pacific in second. He has cast aside the ‘rules-based international order’ as a cloud-castle utopia and insists that Washington will no longer be Europe’s global policeman involved in ‘interventionism, endless wars, regime change and nation building’.