The EU, fed up with U.S. tariffs, seeks cooperation with CPTPP? The investment direction remains unchanged

CPTPP, a free trade agreement led by Asia-Pacific countries excluding the United States, currently includes 12 members: Japan, Canada, Australia, New Zealand, Mexico, Chile, Malaysia, Vietnam, Singapore, and others. In a world where the WTO-led trade order is crumbling, countries that once thrived under the WTO framework have been forced to devise a similar system to resist the rising tide of U.S. tariffs. That effort resulted in CPTPP. But the critical question remains: Can it actually be sustainable?

Trade, by nature, requires a counterpart. To export, there must be someone willing to import. Yet most CPTPP members joined the pact with export-oriented motives, and their economic models are fundamentally built around exports. In other words, these are countries that lose by importing—which begs the question: How can trade flourish when everyone wants to sell, but no one wants to buy? That is the fundamental dilemma of CPTPP—more precisely, the limit of trade without the United States.

Let’s dig deeper.

Both Europe and Japan are driven by export-heavy industries, especially the automotive sector. In fact, Europe could be described as a union built around its car industry, given the massive role it plays in the region’s economy. Germany, for example, sees automobiles account for nearly 15% of its GDP. Japan’s auto sector—when including its ripple effects across employment and technological spillover—is similarly estimated to account for around 10% of its economy. For both regions, automobiles are a red line—industries they cannot afford to compromise.

So, would either truly welcome deeper free trade?

When two economies with overlapping industrial structures engage in trade, competition inevitably overshadows cooperation. Trade becomes less about mutual benefit and more about territorial disputes, leading to clear winners and losers. And those on the losing side? They’ll likely reject the very framework that made them vulnerable in the first place.

We can already observe this dynamic in the deteriorating trade relationship between China and Europe.

In the past, China complemented Europe’s economy by serving as a low-cost supplier in primary and secondary industries. But as China’s technological capabilities advanced into tertiary and quaternary sectors, its presence began to overshadow European manufacturers. Now, Chinese electric vehicles are gaining a larger footprint in Europe than many legacy brands. It’s a direct challenge to Europe’s manufacturing base. In response, Europe has introduced a suite of defensive measures: anti-dumping tariffs, subsidy restrictions, and new technical barriers—erecting walls against China, much like the U.S. has done.

This brings us to the irreplaceable role of the United States in global trade.

Without buyers, sellers are powerless. And in global trade, the U.S. is the ultimate buyer—the market both Europe and Asia desperately need. The U.S. understands this leverage better than anyone, and has turned that knowledge into a strategic weapon: tariffs.

In exchange for access to its massive consumer market, the U.S. demands political alignment, industrial segmentation, capital controls, and technology transfers. Market access has become weaponized—a potent geopolitical bargaining chip.

As a result, many countries have reluctantly accepted tariffs of 15% to 50%, simply to stay in the game. Trump, in particular, has refined this approach over time:

• China faces steep tariffs and tech blacklisting.

• Europe and Japan are pressured on currency policy, subsidies, and investment rules.

• Allies like South Korea are offered a conditional alliance: “cooperation instead of tariffs.”

  
  

Post-WTO, the U.S. has redefined the rules of the game—not by promoting free trade, but by restricting it, forcing the world to realize just how critical the U.S. market really is. And by amplifying its scarcity value, the U.S. is tightening its grip on global trade and engineering growth on its own terms.

From a strategic investment standpoint:

The U.S. currently leads the global tariff regime. But among nations without access to the U.S. market, how will trade relationships evolve?

In the absence of a dominant buyer, advanced economies reliant on secondary and tertiary industries will eventually build trade barriers to protect themselves. Today the pressure comes from the U.S., but soon these countries may begin raising tariffs against one another.

This has critical implications:

• Nations within U.S.-led supply chains—despite short-term pains—still have a chance to grow under the umbrella of a dominant buyer.

• Nations outside that sphere—particularly those aligned with China—face long-term headwinds.

Caution is warranted with China-focused investments, while greater attention should be paid to the U.S. market and the companies that benefit from its strategic dominance. Now more than ever, investors must look toward U.S.-based enterprises that not only lead growth, but define the future of the global economy itself.