Very disappointed: US Treasury Secretary on India-EU trade deal

US Treasury Secretary Voices Sharp Criticism

US Treasury Secretary Scott Bessent has publicly lambasted European leaders for sealing a major free trade agreement with India, describing their actions as deeply disappointing. In a candid interview, he highlighted how this move undermines efforts to pressure India over its purchases of Russian oil, especially as Europe stands on the front lines of the ongoing Ukraine conflict. Bessent pointed out that the United States had imposed a 25 percent tariff on India specifically for buying sanctioned Russian crude, but Europe chose not to follow suit.

Instead, the EU pushed forward with the deal, which Indian officials have hailed as the "mother of all deals." This landmark pact, India's 19th trade agreement, aims to slash tariffs on most goods and open up a massive market spanning two billion people. Bessent argued that Europe's reluctance to join the tariff measures was all about securing this trade advantage, revealing a preference for business interests over geopolitical unity.

His remarks came amid heightened global trade tensions, with the US under the Trump administration aggressively pursuing policies to protect domestic industries through tariffs and renegotiated deals. The India-EU agreement, finalized just days ago, is seen by Washington as a direct response to these pressures, as partners seek alternative markets.

Linking Trade to Geopolitical Tensions

At the heart of Bessent's frustration lies a chain of economic and strategic grievances tied to the Russia-Ukraine war. He accused Europe of indirectly financing Russia's war machine by purchasing refined petroleum products from India, which had sourced the raw Russian oil despite international sanctions. While the US acted decisively with tariffs to deter such transactions, Europe held back, allegedly to avoid jeopardizing the long-awaited trade negotiations with New Delhi.

"Again, they should do what’s best for themselves, but I will tell you I find the Europeans very disappointing because the Europeans are on the front line of the Ukraine-Russia war. India started buying sanctioned Russian oil, and guess who was buying the refined products? The Europeans. So, the Europeans have been funding the war against themselves."

This deal, decades in the making, promises to double EU exports to India by 2032 and save European firms billions in duties. For India, it means boosted exports to the 27-nation bloc, easing the sting of American tariffs and fragile global supply chains. Critics in the US, including Trade Representative Jamieson Greer, have chimed in, suggesting India gained the upper hand with its low-cost labor, while Europe seeks outlets for overproduced goods amid shrinking US market access.

Bessent's comments underscore broader US concerns about allies pivoting away from Washington in a fragmented world economy. With high US duties looming over various partners, including potential hikes for the EU itself, the administration views these independent deals as a challenge to its "America First" agenda. The timing, right after the deal's announcement by Prime Minister Narendra Modi and EU leaders, amplifies the diplomatic friction.

Implications for Global Trade Dynamics

The India-EU free trade agreement arrives at a pivotal moment when international commerce faces unprecedented strains from tariffs, geopolitical strife, and supply chain disruptions. For India, it's a strategic win, diversifying export destinations and fortifying its economy against US protectionism. European nations, grappling with their own energy woes and war proximity, stand to gain from cheaper access to India's vast consumer base and manufacturing prowess.

Yet, from the US perspective, it signals a troubling trend of alliances forming to circumvent American leverage. Bessent warned that Europe placed trade above supporting Ukraine, potentially weakening collective sanctions against Russia. US officials like Greer have noted how President Trump's domestic production push is forcing others to scramble for new partners, with the EU turning to India as a key outlet. This could reshape competition in sectors from automobiles to agriculture, altering global market balances.

As negotiations continue on multiple fronts—including with Canada and Mexico—these developments highlight the risks of escalating trade wars. Businesses on all sides watch closely, weighing opportunities against rising barriers. The deal's transformative five-year agenda promises deeper ties, but it also risks straining transatlantic relations already tested by differing priorities.

In summary, Scott Bessent's pointed critique reveals deep US dismay at the EU-India pact, framing it as a betrayal amid the Ukraine crisis and tariff battles. The agreement boosts bilateral trade but underscores widening rifts in Western unity and global economic strategies, with long-term effects still unfolding.