WASHINGTON, Jul 17: A tariff war launched by the United States has apparently encouraged its biggest trading partner, the European Union, to look elsewhere, a New York Times report said on Tuesday, citing a latest trade deal between the EU and Japan that will cover quarter of the global economy.

President Trump's move to impose tariff on steel and aluminum annoyed many of its old allies, including the EU, Canada and Mexico, which are now responding with their own duties on imports from the United States.

In addition, President Trump has also imposed, or plans to impose, duties on Chinese import worth more than $200 billion. China has responded with its own tariffs on American goods, raising prospects of a trade war that will undermine the global economy.

“President Trump is inciting a trade war, undermining NATO and painting Europe as a foe. It's no wonder, then, that the European Union is looking elsewhere for friends,” the report said, referring to his recent tirade against the NATO members over defense spending.

While, the EU engages in a high-level trade diplomacy with the US, it is cementing its ties with Asian giants such as Japan, with whom it signed its largest trade deal on Tuesday.

The deal will cut duties on products like European wine and cheese, while gradually reducing tariffs on cars. In addition to signing deal with Japan, the report said that the EU has either concluded or in working with countries like Australia, Vietnam and even China to boost its trade.

The move by the EU will reduce its reliance on its trade with its biggest partner, the United States.

The NYT report said the deal with Japan and other countries showed a more assertive Europe, which is looking past the “frosty ties” with the United States over trade.

Several European leaders have in recent months spoke more of free trade in a rebuke the US tariffs which is seen by many as a semblance of protectionist policies.

But, while the European leaders are putting a brave face and trying to counter trade barriers by negotiating deals with other countries, the fact would remain that the United States is still its largest trading partner and it would be difficult to offset the impact of the US tariffs on imports like cars.

According to the report, Europe has also concluded a deal in principle with Mexico to update an existing free-trade agreement, expected to be finalized by the end of the year. Similarly, accords with Vietnam and Singapore were also in final stages of approval.

The EU is also negotiating with other countries including Australia, Chile, Indonesia, New Zealand, Tunisia and the so-called Mercosur countries Argentina, Brazil, Paraguay and Uruguay.

(APP)

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