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EU leaders ready countermeasures to pressure from Russia, China and Trump

February 13, 2026 4 min read International Relations GS Paper 2 (International Relations Effect of Policies of Developed Countries on India's Interests)
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What Happened

  • European Union leaders broadly agreed on a plan to restructure the 27-nation bloc's economy for greater global competitiveness, in response to antagonism from the US (tariffs), strong-arm tactics from China (critical mineral export restrictions), and hybrid threats from Russia.
  • The plan includes measures to coordinate energy grid upgrades, deepen financial integration, and loosen merger regulations to allow European firms to grow and compete globally.
  • French President Macron renewed his call for "Eurobonds for the future" to challenge the hegemony of the dollar.
  • The strategy draws on the Mario Draghi report (2024), which recommended cutting regulations, infrastructure investment, and expanding trade ties.
  • European Council President Antonio Costa described the meeting as a "real game changer" as leaders backed plans to further integrate and simplify the bloc's financial systems.

Static Topic Bridges

European Strategic Autonomy and the Draghi Report

The concept of European strategic autonomy has gained momentum since the COVID-19 pandemic and the Russia-Ukraine conflict exposed the EU's dependencies on external energy, technology, and defence. Former ECB President Mario Draghi's 2024 competitiveness report provided a blueprint for addressing these structural vulnerabilities.

  • The Draghi Report identified an annual investment gap of EUR 750-800 billion needed to achieve competitiveness targets.
  • Key recommendations include simplifying regulations, creating a Capital Markets Union, investing in green and digital transitions, and reducing energy costs.
  • The EU's share of global GDP has declined from approximately 26% in 2000 to under 18% in 2025.
  • European strategic autonomy encompasses defence (reduced dependence on NATO/US), technology (digital sovereignty), energy (reducing Russian gas dependency), and trade (supply chain resilience).

Connection to this news: The EU leaders' agreement to act on the Draghi Report's recommendations signals a concrete shift from analysis to implementation, driven by the convergence of three external pressure vectors: US trade aggression, Chinese economic coercion, and Russian hybrid warfare.

Impact of US Tariffs on EU and Global Trade

The current US administration has imposed tariffs on European goods, triggering countermeasures and deepening the transatlantic trade rift. The EU is the US's largest trading partner, with bilateral trade exceeding $1.3 trillion annually.

  • The US has imposed 25% tariffs on EU steel and aluminium and threatened broader sectoral tariffs (automobiles, agriculture).
  • The EU has responded with targeted counter-tariffs on iconic US products (bourbon, motorcycles, agricultural goods).
  • The EU-US Trade and Technology Council (TTC), established in 2021 as a cooperation platform, has effectively stalled under current tensions.
  • The EU is accelerating Free Trade Agreement negotiations with Mercosur, India, Australia, and ASEAN nations to diversify trade partnerships away from the US.

Connection to this news: The EU's competitiveness plan is partly a defensive response to US tariff aggression, aiming to build internal economic resilience while diversifying external trade partnerships, with direct implications for the EU-India FTA negotiations.

EU-India Relations and Strategic Convergence

India and the EU share growing strategic convergence on issues including connectivity, climate action, digital governance, and maintaining a rules-based international order. The EU-India FTA negotiations, relaunched in 2022 after a nine-year pause, are a central plank of this evolving partnership.

  • EU-India bilateral trade stood at approximately EUR 120 billion in 2024, making the EU India's third-largest trading partner.
  • The EU-India Trade and Technology Council (launched 2023) covers clean energy, quantum computing, AI, and supply chain resilience.
  • The EU's Connectivity Strategy and India's Act East Policy overlap in the Indo-Pacific, with joint infrastructure projects in third countries.
  • The EU is India's largest source of foreign direct investment, accounting for approximately 18% of total FDI inflows.

Connection to this news: The EU's urgency to diversify trade partnerships amid US and Chinese pressure creates a window of opportunity for India to advance the EU-India FTA and position itself as a preferred partner for European supply chain diversification.

Key Facts & Data

  • The Draghi Report identifies an annual EU investment gap of EUR 750-800 billion.
  • The EU's share of global GDP has declined from approximately 26% (2000) to under 18% (2025).
  • EU-US bilateral trade exceeds $1.3 trillion annually.
  • The US has imposed 25% tariffs on EU steel and aluminium.
  • EU-India bilateral trade stood at approximately EUR 120 billion in 2024.
  • The EU is India's largest FDI source, accounting for approximately 18% of total FDI inflows.
  • Macron proposed "Eurobonds for the future" to finance the competitiveness plan and challenge dollar dominance.