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US Tariff Threats at Davos Spur India-EU Trade Pact Acceleration

The World Economic Forum in Davos is confronting a landscape where the US promotes stability while applying economic pressure on allies. A report details US tariff threats against the EU and India following disputes over US ambitions regarding Greenland and ties with Iran. In response, India and the European Union are accelerating negotiations to finalize a major free trade agreement. A framework deal covering most of their €180 billion bilateral trade is expected to be signed on January 27.

Key Points: US Tariff Threats Drive India-EU Trade Deal at Davos WEF

  • US uses tariffs to pressure allies over Greenland
  • Trump note abandons exclusive peace focus
  • India faces 25% tariff hike over Iran ties
  • India-EU trade deal expected Jan 27
2 min read

WEF in Davos faces US political stability push with economic pressure: Report

Report details US political pressure & tariff threats over Greenland, pushing India and the EU to fast-track a major free trade agreement.

"It is therefore hardly surprising that India and the European Union are accelerating the conclusion of a mutual Free Trade Agreement. - Times of Israel report"

Tel Aviv, Jan 20

The ongoing World Economic Forum 2026 in Switzerland's Davos has long served as a platform for economic vision and collaboration among political and business leaders. This year, the forum may be forced to confront a different economic and political landscape - one where the United States aims to promote a more stable political order, but simultaneously imposes sanctions, puts economic pressure, and infringes sovereignty whenever proposed solutions clash with Washington's perceived interests, a report said on Tuesday.

Citing a report from the conservative outlet Newsmax, it said, in a message released on Monday morning, US President Donald Trump sent a written note to Norway's Prime Minister stating that he no longer feels obligated to "think exclusively about peace" following his failure to secure the Nobel Peace Prize. The message also reiterated his demand for American control over Greenland.

"The message, which was widely circulated by the US administration to other countries as well, was written in response to a brief note sent to Trump by Norwegian Prime Minister Jonas Gahr Store and Finnish President Alexander Stubb. Both leaders expressed opposition to the US decision to impose tariffs on European allies, in the context of their refusal to allow the United States to assume control over Greenland, according to Store's statement," a report in Times of Israel detailed.

It detailed that European Union member states were notified of an additional tariff of around 10 per cent in response to their opposition to the US move on Greenland. India, for its part, received a warning of a 25 per cent tariff hike due to its ties with Iran - adding to an existing 50 per cent - comprising a standard 25 per cent tariff and another 25 per cent on Russian oil imports.

"It is therefore hardly surprising that India and the European Union are accelerating the conclusion of a mutual Free Trade Agreement. Last week, the German Chancellor visited India, and in early February, French President Emmanuel Macron is expected to do the same," it stated.

"In the interim, on January 27, a framework agreement for a free trade deal between the two blocs is expected to be signed, covering most of the bilateral trade volume - estimated at approximately €180 billion - with the exception of agricultural trade, whose regulation has been deferred, even though lower tariffs than those currently in place have already been agreed," it further noted.

- IANS

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Reader Comments

R
Rohit P
A 25% tariff hike on top of existing 50%? That's brutal economic coercion. It's high time the world questioned this "rules-based order" when the rule-maker keeps changing the rules to suit itself. India should stand firm.
D
David E
From an outside perspective, it's fascinating to see India and the EU coming together like this. Global trade dynamics are definitely shifting. The US pushing for control over Greenland seems like a bizarre colonial hangover, to be honest.
A
Aditya G
The part about the Nobel Peace Prize is... telling. When global leadership is driven by personal grievance rather than collective good, smaller nations suffer. India's foreign policy must be pragmatic and protect our national interest above all.
S
Sarah B
While the EU-India FTA is promising, I hope our negotiators don't compromise on key sectors like agriculture and dairy for our farmers. Strategic autonomy also means protecting our domestic producers from unfair competition.
K
Karthik V
Davos talks about collaboration, but actions speak louder. Unilateral tariffs and threats over sovereign decisions (like ties with Iran) show a clear double standard. India is right to look for reliable partners elsewhere. Jai Hind!

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