It has been an exciting few weeks for deals – both made and broken. The EU made a trade deal with the Mercosur grouping, which included a carbon-trading exemption that will most likely be replicated in the upcoming deal with India. Meanwhile, the US, which already had an agreement with the EU has now threatened new tariffs over Greenland. As a result, the EU has suspended ratification of the deal, which was planned for this week.
The India-EU deal shows how obdurate bureaucracies from two stubborn countries could still make a decision when their survival is at stake. Even with agriculture mostly excluded, the India-EU free trade agreement promises to be the largest, ever.
The truth is that these deals are getting made and broken because the World Trade Organisation has effectively failed. Globalisation has not increased prosperity. But Trump’s solutions have not worked either – all it did was provoke a crowd tiptoe effect, a corollary of short-term game theory thinking, in which one person stood on their tiptoe, so the second one followed and very soon, everyone is more unstable and no one has a greater advantage.
This does not, however, negate the existence of the problem. What it does do, is introduce a greater element of free enterprise into the deals, where countries are able to strike deals that best suit their needs.
That said, when Trump dismisses Demark for using dog sleds for defence, he is not peddling fake news. Europe’s military and industrial complexes are a mess. This writer was on a two-week trip in Europe recently, where he got a chance to experience Europe’s inefficiency first-hand. A planned two-week trip stretched to seventeen days because Copenhagen, Frankfurt and Amsterdam airports could not handle two inches of snow and shut down for days! The telephone and online reservations system collapsed because the flights were under “airport control”. Such experiences are unthinkable in the US where reservation systems work seamlessly and – surprise, surprise – airports function in snowy conditions. In that sense, Trump’s grievance that the EU relies too much on US support is valid. What is not valid is the solution: tariffs and xenophobia.
That said, the Mercosur trade deal has shown that notorious bureaucracies like Europe (and India) can fix themselves, if they are forced to do so. For now, Europe will probably fold, if only because their Best Alternative to a Negotiated Agreement would be to have Greenland taken by force, which would be a worse humiliation. For far too long, Europe has prospered on the American nuclear umbrella while America has deprived its own citizens of a comparable social security net.
Those days are over, thanks to Trump.
The only problem? Americans still have no social umbrella. Almost a million immigrants have been deported, massive tariffs have been imposed and twelve months later, US wages are still low, unemployment is high and affordability is still a problem. Perhaps removing immigrants and imposing tariffs is not a solution after all.
Who are the winners? They will be those who can best adjust to the changed circumstances, and stand on tiptoe while managing the instability.
China is currently the standout star, increasing its trade surplus to over $1.2T against the rest of the world. The problem is that its Q4 2026 GDP stalled at 4.5% and it is still not making any friends, as it continues its “peaceful rise” — except for Taiwan, Indian salami-slicing, rare earth curbs, and everything else. So, the more China succeeds, the less it is trusted, and its leaders seem to have a blind spot as to how they are perceived.
India has also done surprisingly well, not only with its expected EU deal but also its trade and defense alliance with the UAE to counter the Pakistan-Saudi Arabia-Turkey axis (which could well include Israel later on) and its proposal to link the BRICS digital currencies based on its own UPI system — the largest Digital Public Infrastructure in the world. As far as alienating the US is concerned, India seems to have decided that it no longer matters. They quietly imposed tariffs of 30% on US pulses. America can hardly complain, when its own tariffs are at 50%.
The message is clear: Trump deserves praise for focusing the world’s attention on some major structural disparities. However, he is way off on his solutions. If he does not correct himself quickly, America will lose, while the EU, China and India will gain prominence. The multi-polar BRICS-led world order will take over, as Trump wonders where he went wrong in his quest to Make America Great Again.
Read more: When Worlds Collide: The anxieties and choices of 2026
