European Union in January 2026: the most important developments in economy
The European Union's economic agenda in January 2026 was dominated by the trade agreement with the South American bloc Mercosur. EU member states approved the deal on 9 January, ending a negotiation of about 25 years, although France said it would vote against it and farmers protested over agricultural standards. The agreement was signed on 17 January in Asunción, Paraguay, with Argentine President Javier Milei present and Brazilian President Lula absent. On 21 January the European Parliament voted to delay its approval and referred the pact to the EU's top court for a legal review. An EU diplomat said the deal was still likely to take effect provisionally in March.
A second dispute concerned the United States. After President Donald Trump threatened tariffs on eight EU countries over Greenland, EU ambassadors met in emergency session and the bloc prepared counter-tariffs worth about 93 billion euros, which could have taken effect as early as 7 February. The European Parliament suspended work on ratifying a separate trade deal with the US. On 22 January Trump dropped the tariff threat, and on 23 January EU leaders suspended the countermeasures for six months, warning they could be reactivated.
The EU also pursued other trade partners. It concluded a free trade agreement with India on 27 January, which officials described as covering a quarter of global GDP; US Treasury Secretary Scott Bessent called it "disappointing". Earlier, on 12 January, the EU and China agreed on minimum prices for Chinese electric vehicles, and at the end of the month China imposed tariffs of up to 11.7% on EU dairy products.
Elsewhere, the Commission proposed a €90 billion loan for Ukraine for 2026 and 2027, tied to purchases of European-made weapons. On 29 January EU foreign ministers imposed sanctions on 15 Iranian officials over the crackdown on protests. On 26 January the EU opened a formal investigation into Elon Musk's chatbot Grok and his platform X over sexually explicit deepfake images. Wind and solar power overtook fossil fuels in the EU electricity mix in 2025.
by WorldBrief & Maksim Micheliov | AI-generated summary
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