President Trump’s reaction to the EU-India Free Trade Agreement

The ink is still not dry on the historic trade deal between the European Union and India, but all eyes are now on how President Donald Trump will respond to the free trade deal, which is widely seen as a strategic hedge against the threat of erratic U.S. trade policy and tariffs.

The deal, which was confirmed early Tuesday and was nearly two decades in the making, will see the trading giants gradually lower tariffs to zero on most of each other’s imports, except for a few key products and sectors.

President Trump has yet to publicly react to the EU-India deal announced early Tuesday morning European time, but it is unlikely that he and the White House are happy with the deal. Treasury Secretary Scott Bessent has already criticized the EU for pursuing a trade deal with India.

“The United States has made far greater sacrifices than European countries. We imposed 25% tariffs on India for buying Russian oil. Guess what happened last week? European countries signed trade deals with India,” Bessent told ABC News on Sunday.

Indian Oil and Natural Gas Minister Hardeep Singh Puri told CNBC on Tuesday that U.S.-India relations remain strong and he expects a trade deal to be finalized soon.

“The structure of the[US-India]relationship is very strong. I try to look on the positive side, but I’m not a fortune teller. I don’t know when a trade deal will be signed, how long it will take… but everyone needs to be a little calm,” Hardeep Singh Puri told CNBC’s Amitoy Singh.

He said India supports the multilateral trading system and this is evident in the latest agreement with the EU. “If you say that the multilateral trading system, the global economy, is in trouble, I don’t think anyone would argue with that assessment. There are some sectors on the Indian side that are looking forward to a strengthened European market.”

Indian Prime Minister Narendra Modi earlier praised the “groundbreaking” free trade agreement, which he and European Commission President Ursula von der Leyen also called the “mother of all agreements”. Von der Leyen said the agreement will allow the two countries to develop their strategic relationship.

Both leaders are scheduled to speak at the EU-India summit later on Tuesday and are likely to praise the deal for easing trade barriers and lowering tariffs at a time when export-based industries face punitive tariffs from the United States.

Last year, the White House slapped a 15% tariff on imports from the EU, despite agreeing a trade deal with the EU, and a more punitive 50% tariff on products from India, in part due to continued purchases of oil from Russia.

Hosku Lee Makiyama, director of the European Center for International Political Economy, said the EU-India trade agreement is one of the best deals for both countries, which have traditionally been protectionist in strategic areas of their economies, such as agriculture and automobiles.

Lee Makiyama told CNBC on Tuesday: “This is an agreement they can do and it will have a positive impact, but the US and China will remain closed as new markets open. So in that respect, this is probably one of the best agreements they can do right now.”

He added that both India and the EU had reasons to go ahead with the deal despite the inevitable anger in Washington.

“But the big difference[in this landmark deal]is that India didn’t actually secure a deal with the US,” he told CNBC’s “Europe Early Edition.” But he added: “EU trade ministers are getting used to the fact that every week there’s a new tariff threat from Washington, and of course their skin gets a little thicker[each time].”

There is no doubt that there is some degree of wariness in Europe about upsetting the United States, especially with regard to the principle of collective defense, a central tenet of the NATO military alliance, at a time when American commitments to European allies appear very fragile.

David McAllister, Member of the European Parliament and Chair of the Foreign Affairs Committee, summed up the need for the region to maintain a balance between pursuing its own economic interests while maintaining good relations with Washington.

“Europe needs to be more sovereign. Europe needs to grow, which means it needs to become more economically competitive,” he told CNBC’s “Europe Early Edition” on Tuesday.

“We need to do more for our own security and defense, but we also want to maintain a close transatlantic relationship with the United States…but this relationship needs to be based on mutual respect and trust,” he said.