U.S. Treasury Secretary Scott Bessent has strongly criticized the recently finalized trade agreement between the European Union and India, alleging that Europe has prioritized commercial interests over supporting Ukraine in the face of Russian aggression. Bessent voiced his disappointment on Wednesday, stating that the EU's decision to conclude the "mother of all deals" with India demonstrates a willingness to overlook the ongoing conflict and its implications.
Bessent's criticism centers around the claim that European countries are indirectly funding Russia's war efforts by purchasing refined fuel products from India that are produced using sanctioned Russian crude oil. He argues that the EU's pursuit of a trade agreement with India has made them hesitant to align with Washington's tougher stance on tariffs and economic pressure aimed at curbing Russia's oil revenue. Bessent last week had signaled the potential removal of the 25% additional U.S. tariffs on India following a sharp reduction in Indian imports of Russian oil.
The EU-India free trade agreement, which has been years in the making, aims to boost two-way trade and reduce the bloc's reliance on the United States amidst growing global trade tensions. The EU anticipates that the deal will double EU exports to India by 2032 through the elimination or reduction of tariffs on 96.6% of traded goods. This is expected to result in savings of approximately 4 billion euros in duties for European companies. The agreement also intends to strengthen supply chains amid global trade fragmentation, opening a market of nearly two billion people.
Indian Prime Minister Narendra Modi has hailed the agreement as "historic," emphasizing its potential to accelerate the "Atmanirbhar Bharat" (self-reliant India) campaign and create numerous opportunities for Indian youth. The agreement also includes a five-year agenda focused on expanding trade and defense cooperation, with the goal of protecting a rules-based global order.
Bessent's remarks come amid heightened tensions after President Donald Trump threatened to raise tariffs on imports from certain European countries. He questioned why Brussels balked at joining Washington's decision to impose 25% tariffs on India last year. He also cautioned Ottawa not to start a fight ahead of coming trade talks.
The U.S. Treasury Secretary's comments underscore the complex geopolitical landscape in which trade agreements are forged, particularly in light of the ongoing war in Ukraine. While the EU frames the deal as a means of fostering economic growth and strategic independence, critics like Bessent view it as a compromise of principles that undermines efforts to isolate Russia and support Ukraine. This disagreement highlights the diverging priorities and approaches among Western nations in addressing the economic and political ramifications of the conflict.
