Brussels:The European Union is intensifying its efforts to diversify its global trade partnerships as it faces growing economic uncertainties and diminishing reliability from its major trading partners, the United States and China. This strategic shift is detailed in a report by Qatar National Bank (QNB).
According to Qatar News Agency, the EU is pursuing new trade agreements with countries such as India, the Mercosur bloc, Mexico, Indonesia, and Australia to open new markets for European exports and secure critical raw materials. These efforts aim to enhance the resilience of the European economy, with projections indicating that the share of EU external trade covered by free trade agreements could rise to 53.3%.
Among the challenges highlighted are a 15% tariff ceiling on most EU exports to the US under a new trade framework and an anticipated EUR 359.8 billion goods trade deficit with China by 2025. The EU is also increasing its engagements with Southeast Asia, with ongoing negotiations involving the Philippines, Thailand, and Malaysia to strengthen its access to this rapidly growing economic region.
QNB identifies three main objectives of the EU’s trade strategy reducing dependence on major trading partners, accessing new markets for economic growth, and strengthening economic security by ensuring more reliable supplies of essential raw materials. This approach reflects a broader effort by Europe to build a diversified and resilient trading network in a fragmented global economy.
The report further notes China’s trade surplus with the EU increased by 24% in the first four months of 2026, as Chinese exporters shifted more shipments to European markets. The EU-India trade agreement is highlighted as a key opportunity, offering substantial tariff reductions on European machinery, chemicals, and automobiles, with an aim to double EU goods exports to India by 2032 and save European businesses around EUR 4 billion annually in customs duties.
The provisional implementation of the EU-Mercosur agreement in May 2026 is expected to boost the bloc’s annual exports by 39% by 2040. The importance of trade partnerships in securing critical raw materials is emphasized, given Europe’s reliance on China for rare earth elements crucial to various industries. Agreements with resource-rich nations like Canada and Indonesia could help diversify supplies of strategic materials such as nickel, cobalt, and copper.
The report concludes that while diversifying supply chains won’t fully eliminate Europe’s dependence on China, it will mitigate risks associated with reliance on concentrated sources of critical materials.