It’s nearly been a year since the second Trump administration came into office, with President Donald Trump taking the oath of office one year ago next week. In that time, most of the world’s leading economic powers have seen the U.S. government impose painful barriers to easy trade, such as tariffs.
While much of 2025 saw the U.S’s largest trading partners try to reach comprehensive trade deals with the U.S. to roll back many of the tariffs, 2026 so far has seen some of America’s key trading partners move on and strike deals between themselves and other crucial trade regions. In the process, these countries are bypassing the U.S. Two of the most noteworthy situations where we are seeing this play out are a newly announced deal between Canada and China, and a tentative deal between India and the European Union (E.U.)
A major milestone for Canada with Canada-China trade deal announcement
As Canadian Prime Minister Mark Carney spoke from the podium Friday in China’s capital Beijing, history was being made. The Canadian leader announced a deal between Canada and China to reduce tariffs on Chinese electric vehicle imports. But the most noteworthy part of the announcement was that Canada was choosing to align itself more closely with the Chinese government than the American government.
Until recently, the U.S.-Canada relationship on trade and other matters seemed inseparable. But last year, when Trump imposed steep tariffs on certain Canadian goods and threatened broader trade disputes with America’s northern neighbor, Canada began the long process of re-aligning its economic priorities with other countries.
As part of Canada’s new deal with China, tariffs on some Chinese electric vehicles will be reduced, with Canada potentially bringing in nearly 50,000 Chinese electric vehicles at a 6.1 percent tariff. China, for its part, will allow more imports of Canadian oil products.
In his remarks, Prime Minister Carney called China a more “predictable” trade partner than the U.S., noting that “you see results coming from that”.
India and E.U. close in on comprehensive trade deal without U.S.
As news was being made in Beijing, history was also being shaped roughly 3,500 miles away in New Delhi, India’s capital. Indian trade minister Rajesh Agrawal announced that India and the European Union (E.U.) were quickly closing in one a trade deal that would see India’s vast consumer and business markets opened up on a large scale to E.U. businesses and consumers.
If the deal is finalized, as is expected by both sides of the negotiating parties, the deal would represent India’s largest trade deal ever globally. The deal could close as early as January 26th when E.U. leaders visit India. Although India and the E.U. first started exploring a trade deal in 2022 long before Trump’s tariffs, the U.S. trade barriers imposed by the second Trump administration have forced the two parties to come to the table with new urgency amid the U.S. not yet reaching a deal with India after nearly a year of conversations.
The big picture for U.S. and world trade relations
Taken together, the two pieces of trade news today signal that the world is beginning the long and potentially painful process to move away from the U.S. as a trustworthy trading partner. Although countries had threatened to do so over the past year, seeing these countries actually act brings the developments to a new level.
The U.S. still has time to reverse this trend before the country makes itself more isolated on the global trade stage, but the U.S. must close more comprehensive trade deals and offer concessions in order to do so.
