At a moment when the United States and China have grown menacing and some democratic leaders are calling for middle powers to band together, the European Union and Australia have agreed to a trade deal that was eight years in the making.
Ursula von der Leyen, the president of the European Union’s executive arm, and Anthony Albanese, Australia’s prime minister, announced the agreement in Canberra on Tuesday. Both sides still need to ratify it, a process that in Europe can take months or even longer.
The two sides began negotiating in 2018, but talks broke down back in 2023 when Australia was pushing for a deal that would have allowed it to send more beef subject to low tariffs than the European Union was willing to accept.
But hostility from other trading partners has pushed the two sides closer together. The United States has levied higher tariffs on its trading partners globally, making its large consumer market a less attractive export market for Australian beef as well as European cars and handbags. China has shown a willingness to weaponize its chokehold on minerals that Europe desperately needs for both its green energy transition and its rearmament push.
For the European Union, critical mineral access is one of the major benefits of the deal: It is poised to strengthen the 27-nation bloc’s access to aluminum, lithium, manganese and hydrogen, among other needed materials. For Australia, the deal will result in more seamless access to Europe’s 450 million consumers, a boon at a time when the nation’s trade terms with the United States have worsened.
The Europeans did agree to take more Australian beef, though that quota will phase in over 10 years, “ensuring a very gradual implementation,” per the E.U. fact page. The provision may anger European farmers, who are a powerful political force, and the bloc emphasized that it will make up a tiny portion of Europe’s overall beef consumption: about 0.5 percent.
“Today we are telling an important story to a world that is deeply changing. A world where great powers are using tariffs as a leverage and supply chains as vulnerabilities to be exploited,” Ms. von der Leyen said Tuesday. “In our story, open, rules based trade delivers positive sum outcomes. Trust matters more than transactions.”
Mr. Albanese said the deal would be worth about $7 billion to the Australian economy, for which Europe is the third biggest trading partner. For European producers, the agreement will mean savings of more than $1.1 billion in tariffs over the next decade, Ms. von der Leyen said.
The pact is part of Europe’s push to deepen its global trade agreements and broaden its economic relationships. This year, Ms. von der Leyen and her colleagues have struck a deal with four South American countries that is poised to create one of the largest free-trade zones in the world. They have also concluded a landmark agreement with India, which was billed as the largest deal either side had ever signed onto.
That diversification has become a key goal for Europe as its gigantic trading relationship with America comes under strain.
The European Union’s trade with the United States continued to climb in 2025, despite the advent of new tariffs, but much of that growth came early in the year. After tariffs began to take hold, trade struggled.
The European Union and Australia also signed a so-called Security and Defense Partnership on Tuesday, pledging to increase information sharing on global threats and deepen cooperation on efforts against online radicalization and terrorism financing.
Jeanna Smialek is the Brussels bureau chief for The Times.
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