Workers at a Volkswagen factory in Zwickau, Germany. Trade chaos is forcing America’s allies closer together, and further from the United States. And as that happens, the European Union is trying to position itself at the centre of a new global trade map. Photo / Ingmar Nolting, the New York Times
BRUSSELS — Trade chaos is forcing America’s allies closer together, and further from the United States.
And as that happens, the European Union is trying to position itself at the centre of a new global trade map.
The bloc learned this weekend that Washington would subject it to 30% tariffs starting from August 1.
Ursula von der Leyen, the president of the EU executive branch, the European Commission, responded with a pledge to keep negotiating.
She also made it clear that, while the EU would delay any retaliation until early August, it would continue to draw up plans to hit back with force.
But that was not the entire strategy. Europe, like many of America’s trading partners, is also looking for more reliable friends.
“We’re living in turbulent times, and when economic uncertainty meets geopolitical volatility, partners like us must come closer together,” von der Leyen said today in Brussels at a news conference alongside the Indonesian president, Prabowo Subianto.
Just as US President Donald Trump threatens to put hefty tariffs on many countries, including Indonesia, the EU is working to relax trade barriers and deepen economic relations.
“In hard times, some turn inward, toward isolation and fragmentation,” von der Leyen said.
Then, in a message implicitly extended to world leaders who have been jolted by Trump’s tariffs, she added, “You are always welcome here, and you can count on Europe”.
It is a split screen that is becoming typical.
On one side, the US sows uncertainty as it blows up weeks of painstaking negotiations and escalates tariff threats.
On the other, the 27-nation EU and other American trading partners are forging closer ties, laying the groundwork for a global trading system that revolves less and less around an increasingly fickle US.
“We in Southeast Asia, especially Indonesia, we really consider Europe to be very, very important in providing global stability,” Prabowo said Sunday.
It will be hard to move away from the US, and Prabowo predicted that America would always be a world leader.
It is home to the world’s largest economy, a bustling consumer market and cutting-edge technologies and services.
But many American trading partners feel that they are left with little choice but to diversify. And while trade relationships are difficult to alter, they are also difficult to change back once they have been totally reorganised.
That is what is happening right now.
EU negotiators had engaged in months of back-and-forth with their US counterparts before Trump’s announcement.
And until the middle of last week, Brussels hoped that it was closing in on at least the framework for a deal: The EU would accept a base tariff of 10%, but it would also push for carve-outs for key sectors.
Instead, Trump began hinting that the bloc — one of America’s most important trading partners — would receive a letter setting out a sweeping, across-the-board tariff rate.
The White House officially notified EU officials on Saturday NZT that their carefully drawn plans had blown up. And yesterday, the public learned from Trump’s social media account that the bloc would be subject to a 30% rate.
Trump simultaneously announced that he would place a similar tariff on goods from Mexico.
Canada’s rate is slightly higher, at 35%. The likes of Thailand (35%), Bangladesh (35%) and Brazil (50%), along with dozens of other US trading partners, appear to be headed for a similar fate.
Trump has backed down from threatened tariffs before, and he has indicated a willingness to negotiate these tariffs down before their August 1 effective date — and the EU and other economies are poised to continue with negotiations.
But the atmosphere is increasingly hostile.
Trump is “instrumentalising uncertainty” to try to force trading partners to make concessions, said Mujtaba Rahman, managing director for Europe at the Eurasia Group, calling the latest announcements a “complete move of the goal posts”.
Trump’s announcement yesterday sharply intensified calls in Europe for forceful retaliation.
“Trump is trying to divide and scare Europe,” said Brando Benifei, who heads the delegation for relations with the US at the European Parliament.
But von der Leyen announced today that the bloc would wait until early August to allow ready-made retaliatory tariffs to kick in.
Those tariffs cover nearly US$25 billion ($41.6b) worth of goods. They had already been suspended once and had been poised to take effect last week.
“At the same time, we will continue to prepare further countermeasures,” von der Leyen said.
Hitting back would be just a first step; drawing closer to outside allies may prove even more meaningful in the long run.
Since Trump’s push to reorder the trading system kicked off in February, the EU has been hustling to strike new trade agreements and deepen existing ones.
Canada and the EU have pulled together. Britain and the EU have had a rapprochement, five years after Britain officially exited the union.
The bloc is working toward closer trading relationships with India and South Africa, and with countries across South America and Asia.
Nor is the European Union the only global power adopting such a strategy.
Canada is also drawing closer to Southeast Asia, while Brazil and Mexico are working to deepen their ties.
Officials have even floated the idea of building trading structures that exclude the US and China, which is widely blamed for supporting its factories to the point that they overproduce and flood global markets with cheap goods.
Von der Leyen recently suggested that Europe could pursue a new collaboration between the bloc and a trading group of 11 countries that includes Japan, Vietnam, and Australia, but that notably did not include the US or China.
One key question, analysts said, is whether America’s allies will go a step further.
Instead of simply collaborating more with one another and leaving the US out, could they actually gang up to counter the US?
Large economies could consider co-ordinating their retaliation to Trump’s latest round of tariffs, said Jacob Funk Kirkegaard, a senior fellow at Bruegel, an economic policy research organisation in Brussels. Banding together could give them more leverage.
“I would start to look for co-ordination,” he said. “That’s the rational thing.”
This article originally appeared in The New York Times.
Written by: Jeanna Smialek and Ana Swanson
Photographs by: Ingmar Nolting and Sam Bush
©2025 THE NEW YORK TIMES