The European Commission released the final text of its long-awaited free trade agreement with Mercosur, the Southern Common Market, on Sept 3, marking another major step in the European Union’s push to broaden partnerships and diversify its global trade network.

The move comes amid mounting pressure from the United States. In April, US President Donald Trump proposed the idea of “reciprocal tariffs”, prompting the EU to accelerate its trade diversification efforts.

“Europe continues to focus on diversifying its trade partnerships, engaging with countries that account for 87 percent of global trade and share our commitment to a free and open exchange of goods, services and ideas,” European Commission President Ursula von der Leyen said. While the US makes up 13 percent of global goods trade, the European Commission’s priority is to protect the remaining 87 percent, Commissioner for Trade and Economic Security Maroš Šefčovič noted.

Negotiations for the EU-Mercosur pact began in 1999 but remained stalled for years. Trump’s repeated warnings of new tariffs on European goods during last year’s election campaign gave the EU fresh urgency, leading to talks and a political agreement with Argentina, Brazil, Paraguay and Uruguay, the four founding members of Mercosur, in December 2024.

This year, intensified US tariff pressure prompted the finalization of the EU-Mercosur Partnership Agreement. Once implemented, it will create one of the world’s biggest trade zones with over 780 million people. The European Commission estimates that the agreement can increase EU annual exports to Mercosur by up to €49 billion ($57.44 billion), significantly expanding its footprint in Latin America and offsetting losses from US tariffs.

Trump’s “reciprocal tariff” approach has dealt a heavy blow to EU-US trade relations. Although a trade agreement was reached, it remains unequal from the EU’s perspective, demanding European investment while exposing its market to US competition and narrowing external opportunities. To counter this unfavorable position, the EU has doubled down on strengthening trade ties with other major economies, striving for diversified and open global commerce.

In Asia, the EU has pursued a multi-pronged strategy. Ties with China remain substantial, with bilateral discussions in July at the 25th EU-China Summit addressing rare earths, electric vehicles and climate cooperation. With Japan, it seeks to launch a competitiveness alliance to boost cooperation on supply chains and critical minerals. Negotiations with India on a free trade agreement are progressing positively, alongside participation in the India-Middle East-Europe Economic Corridor, designed to link the Indian Ocean with the Mediterranean. A Comprehensive Economic Partnership Agreement with Indonesia was also finalized, securing critical raw materials vital to Europe’s clean-tech and steel industries.

The EU has also turned its attention to Africa. Under the Global Gateway initiative, it has invested €40 million to modernize the Douala–N’Djamena trade corridor, with the upgrades expected to improve transport efficiency, lower trade costs and further strengthen economic and trade ties between the two sides.

Behind these moves lies a deeper strategic reassessment. By broadening its global partnerships, the EU is not only countering tariff shocks from the US but also reinforcing its economic security and geopolitical resilience. In a world of mounting uncertainty, the EU is betting that diversification is the surest path to stability.

The views are extracted from Jiuwanli (meaning 90,000 Miles) account and do not necessarily reflect those of facts.org.cn.