European and South American leaders say pact sends ‘clear signal’ amid concerns over global tariffs, isolationism.
European and South American officials have signed a major free trade agreement, paving the way for the European Union’s largest-ever trade accord amid tariff threats and deepening uncertainty around global cooperation.
The deal finalised on Saturday between the 27-nation EU and South America’s Mercosur bloc creates one of the world’s largest free trade areas after 25 years of negotiations.
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The agreement, designed to lower tariffs and boost trade between the two regions, must now gain the consent of the European Parliament and be ratified by the legislatures of Mercosur members Argentina, Brazil, Paraguay and Uruguay.
“We choose fair trade over tariffs, we choose a productive long-term partnership over isolation,” EU chief Ursula Von der Leyen said at the signing ceremony in Paraguay’s capital, Asuncion.
Paraguay’s President Santiago Pena also praised the treaty as sending “a clear signal in favour of international trade” in “a global scenario marked by tensions”.
Brazilian Foreign Minister Mauro Vieira said it was a “bulwark … in the face of a world battered by unpredictability, protectionism, and coercion”.
EU and Mercosur leaders pose for a group photo during the meeting to sign the free trade deal in Asuncion, Paraguay, January 17, 2026 [Jorge Saenz/AP Photo]
The deal received a greenlight from most European nations last week, despite opposition from farmers and environmental groups, who have raised concerns over a surge of inexpensive South American imports and increased deforestation.
Thousands of Irish farmers protested last week against the agreement, accusing European leaders of sacrificing their interests.
But the leaders in Paraguay said the pact would bring jobs, prosperity, and opportunities to people on both sides of the Atlantic.
Together, the EU and Mercosur account for 30 percent of global GDP and more than 700 million consumers. The treaty, which eliminates tariffs on more than 90 percent of bilateral trade, is expected to come into force by the end of 2026.
The deal will favour European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soya beans to enter Europe.
Reporting from Paraguay on Saturday, Al Jazeera’s Latin America editor Lucia Newman explained that the Mercosur countries make up a “huge area that produces enormous amounts of agricultural [products] and raw minerals” that the EU wants.
“Here in South America, they are very, very keen because [the deal] will open up an enormous market for them in Europe – but with more stringent conditions than they’ve had until now. So that will need some accommodating,” Newman said.
She added that it is critical to note the “geopolitical message” that European and South American leaders were sending to the United States and other parts of the world by signing the deal.
“And that is, that this is a gesture to support multilateralism at a time, as Von der Leyen said, when isolationism and tariffs are trying to rule the world,” Newman said.
Just before the signing ceremony, US President Donald Trump announced new tariffs against several European countries over their opposition to his push to take control of Greenland.
The US leader has refused to rule out taking military action to seize the Arctic island – a semi-autonomous territory that is part of Denmark – fuelling widespread international concern and protests.
Weekly insights and analysis on the latest developments in military technology, strategy, and foreign policy.
There are new indications that the U.S. may be edging closer to a new round of attacks or other actions against Iran. In a social media message addressed to Iranian protesters, U.S. President Donald Trump on Tuesday announced that he has cut off any further negotiations with government officials there, urged the massive nationwide demonstrations to continue, and implied future U.S. intervention. The comments made by Trump, who has previously vowed to take action against Iran if the crackdown on protesters grew too bloody, came as reports have emerged that as many as 20,000 people have been killed by the regime.
You can catch up with our previous coverage of the unfolding eventshere.
“Iranian Patriots, KEEP PROTESTING – TAKE OVER YOUR INSTITUTIONS!!!,” Trump proclaimed on his Truth Social platform in response to the increasingly bloody crackdown. “Save the names of the killers and abusers. They will pay a big price. I have cancelled all meetings with Iranian Officials until the senseless killing of protesters STOPS. HELP IS ON ITS WAY.”
Trump ended his posting with “MIGA!!!,” or Make Iran Great Again, a play on his famous campaign slogan. He provided no further details. The White House referred us to Truth Social when we asked for more information. U.S. Central Command, which oversees military operations in the Middle East, declined to comment on whether there has been any new tasking or change in force posture ordered by the White House.
The president’s latest statement on the anti-government protests raging since Dec. 28 came as his national security principals met to discuss the situation, according to White House Press Secretary Karoline Leavitt. Trump did not attend, she added.
In an Air Force One gaggle a few moments ago, Press Sec Karoline Leavitt said that POTUS did *not* attend the national security briefing meeting, though Rubio and other principals were there
Described it as a routine/regularly scheduled meeting in comments to reporters
The U.S. leader’s options for a response “include ordering military strikes on regime sites or launching cyberattacks, approving new sanctions and boosting anti-regime accounts online,” The Wall Street Journal suggested. Trump took the first step, ordering that any nation doing business with Iran would be hit with a 25% tariff.
“Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive….” – PRESIDENT DONALD J. TRUMP pic.twitter.com/UQ1ylPezs9
The social media posting also comes a day after the White House said that while Trump preferred a diplomatic solution to the crisis, he is “unafraid to use the lethal force and might of the United States military. Iranian officials, Trump noted on Sunday, had called him seeking negotiations over Iran’s nuclear programs.
Press Sec Leavitt on Iran: “The greatest leverage the regime had just several months ago was their nuclear program, which President Trump and the United States military totally obliterated… What President Trump will do next only he knows.” pic.twitter.com/SaqGhnQFyL
As we discussed yesterday, and it still holds true today, we have seen no indications of major U.S. military movements that would typically be seen prior to a major offensive or defensive military operation in the region.
Behind the scenes, Trump’s Middle East envoy Steve Witkoff met with exiled Iranian Crown Prince Reza Pahlavi to discuss the situation, Axios reported. Pahlavi, whose fatally ill father, Mohammad Reza Pahlavi, fled Iran ahead of the 1979 Islamic Revolution, has helped spark the uprising from afar.
?????Scoop: White House envoy Steve Witkoff met secretly over the weekend with the exiled former crown prince of Iran, Reza Pahlavi, to discuss the protests raging in Iran, according to a senior U.S. official. My story on @axioshttps://t.co/ZSCzEVwjgf
For its part, Israel is getting close to deciding whether it should attack Iran, a senior IDF official told us. He spoke on the condition of anonymity to discuss operational details. Israel, which fought a 12-day war against Iran in June, remains concerned about the large supply of short-range ballistic and cruise missiles that Tehran did not use during that conflict.
“There is persistent concern regarding potential Iranian retaliation, alongside indications of Israeli preventive activity related to Iran,” the official told us. “All of this is taking place under an exceptionally high level of secrecy, making the full picture difficult to assess. What can be said with confidence is that IDF aircraft and all relevant operational elements are at the highest level of readiness, awaiting a political decision. In my assessment, the moment of decision is closer than ever.”
A senior IDF official tells us Israel’s military has moved to the highest state of readiness in recent days amid the turmoil in Iran. (IAF) IAF
Any action Israel may decide to take “would be carried out exclusively in full coordination with the Trump administration and CENTCOM,” the official added. “The military coordination mechanisms between Israel and the United States are exceptionally strong and continuous, particularly given the presence of senior CENTCOM leadership and coordination elements in Israel. This ensures close operational alignment and real-time information sharing.”
Officially, the IDF is downplaying its potential role in the ongoing unrest.
“In recent days, many rumors have spread against the backdrop of the situation in Iran,” IDF Spokesperson Brig. Gen. Effie Defrin posted on X Monday. “As was clarified previously, the IDF is prepared for defense and on alert for surprise scenarios if required. The protests in Iran are an internal matter. We continue to conduct ongoing situation assessments and will update on any changes if and when they occur. I emphasize – do not lend a hand to rumors.”
ביממות האחרונות נפוצו שמועות רבות על רקע המצב באיראן. כפי שהובהר בעבר, צה״ל ערוך בהגנה ונמצא בכוננות לתרחישי הפתעה במידה ויידרש. המחאות באיראן הן עניין פנימי.
אנחנו ממשיכים לקיים הערכות מצב שוטפות ונדע לעדכן בכל שינוי אם ויהיה. אני מדגיש – אל תתנו יד לשמועות
— דובר צה״ל אפי דפרין – Effie Defrin (@IDFSpokesperson) January 12, 2026
As Washington and Jerusalem mull over whether to strike, more horrific videos and images of the bloody response to the demonstrations are pouring in.
One video purports to show demonstrators coming under fire in Mashhad.
Other videos show huge throngs of people on the streets in Tehran.
The Independent Persian says they’ve been sent this footage reported to show protests in Tehran tonight.
Text on the footage says: “Massive crowd of protesters in Tehran on the sixteenth day (today) of the National Revolution.”
The number of those killed so far varies from about 2,000, according to Iranian government figures, to at least more than 12,000, according to CBS News.
“With phone lines opening back up for calls from inside the Islamic Republic, two sources, including one inside Iran, told CBS News on Tuesday that at least 12,000, and possibly as many as 20,000 people have been killed,” the network stated.
The War Zone cannot independently verify these figures.
A source inside Iran who was able to call out told CBS News on Tuesday that activist groups working to compile a full death toll from the protests, based on reports from medical officials across the country, believed the toll was at least 12,000, and possibly as high as 20,000.…
Iran International, an opposition media outlet, claims that the killings have been carried out in an organized manner by the Islamic Revolutionary Guard Corps (IRGC) and the Basij paramilitary forces it commands.
“Based on information received, those killed were mainly shot by forces of the Islamic Revolutionary Guard Corps and the Basij. This killing was fully organized, not the result of “sporadic” and “unplanned” clashes.” https://t.co/6oDbllwPp2
During his speech at the Detroit Economic Club, Trump repeated comments he made earlier to reporters that while he is getting a wide range of figures on the number of people killed, “one is a lot.”
Reporter: How many protesters have been killed in Iran?
Trump: Nobody has been able to give me an accurate number. Everything is a lot. One is a lot. We will probably find out in the next 24 hours. I think it is a lot. pic.twitter.com/fvVVVbZWrK
Information about events inside Iran is flowing even though officials there have cut off internet and phone service, including trying to jam Starlink receivers, as we noted yesterday.
⚠️ Update: #Iran has now been offline for 120 hours.
Despite some phone calls now connecting, there is no secure way to communicate and the general public remain cut off from the outside world.
What footage makes it through shows extensive use of force against civilians ? pic.twitter.com/GLPtVx6yrX
On Tuesday, the regime posted a video claiming to show dozens of Starlink receivers it has confiscated. Iran has also been hunting down Starlink operators, according to The Wall Street Journal. Possession of these systems is illegal in Iran. We reached out to Elon Musk’s SpaceX company, which operates Starlink, for more details.
⚡️BREAKING
Iran has just announced the seizure of a huge shipment of Starlink
Since June 2025, possession of Starlink in Iran has been subject to espionage laws pic.twitter.com/zDgHz8Kxgv
The crackdown on protests is garnering growing international condemnation.
European Union Commission President Ursula von der Leyen said the organization will propose new sanctions against Iran.
“The rising number of casualties in Iran is horrifying,” she exclaimed on X. “I unequivocally condemn the excessive use of force and continued restriction of freedom. The European Union has already listed the Islamic Revolutionary Guard Corps in its entirety under its human rights sanctions regime. …further sanctions on those responsible for the repression will be swiftly proposed. We stand with the people of Iran who are bravely marching for their liberty.”
The rising number of casualties in Iran is horrifying. I unequivocally condemn the excessive use of force and continued restriction of freedom.
The European Union has already listed the Islamic Revolutionary Guard Corps in its entirety under its human rights sanctions regime.…
German Chancellor Friedrich Merz on Tuesday said the regime of Ayatollah Ali Khamenei appears to be finished as mass protests continue across the country.
“If a regime can only keep itself in power by force, then it’s effectively at the end. I believe we are now seeing the final days and weeks of this regime,” Merz said during a visit to India.
Germany’s Merz Says Iran’s Leadership Is In Its ‘Last Days & Weeks’ | N18G | CNBC TV18
Trump administration officials have claimed the US will manage proceeds from Venezuelan oil sales. (Stock image)
Caracas, January 7, 2025 (venezuelanalysis.com) – The Trump administration has vowed to control Venezuelan oil sales for an “indefinite” period in the wake of the January 3 bombings and kidnapping of Venezuelan President Nicolás Maduro.
“Instead of the oil being blockaded, we’re gonna let the oil flow to US refineries and around the world to bring better oil supplies, but have those sales done by the US,” Energy Secretary Chris Wright said in a Goldman Sachs conference on Wednesday, January 7.
According to Wright, the process would begin with crude that is currently loaded on tankers that have not left Venezuelan shores because of the US naval blockade, before selling future production “indefinitely, going forward.”
A “fact sheet” published by the Department of Energy went on to claim that proceeds from sales of Venezuelan crude “will first settle in US-controlled accounts at globally recognized banks to guarantee the legitimacy and integrity of the ultimate distribution of proceeds.”
The document stated that a “selective rollback” of US economic sanctions will allow transactions involving Venezuelan oil products in global markets. The Department of Energy likewise announced supplies of diluents and equipment to Venezuela’s oil industry, which also require the lifting of sanctions, alongside broader US investment in the oil sector and electric grid.
Secretary of State Marco Rubio affirmed in a Wednesday press conference that the US has a “three-step plan” for Venezuela in the wake of the January 3 military attack. The first step involves “stabilizing” the country to allow for the arrival of US and Western corporations, before a stage of “national reconciliation” and finally a “transition.”
In the wake of the strikes that killed over 80 people in the Caribbean nation, Trump and administration officials have repeatedly threatened the Venezuelan government into accepting its demands, especially in the oil sector.
On Wednesday, US authorities announced the seizure of two new tankers as part of efforts to strangle Venezuelan crude exports. Rubio recently referred to the US’ naval blockade as a “lever of leverage” against Caracas. US forces had previously seized two other tankers transporting Venezuelan crude.
According to ABC, Washington has demanded that Caracas’ oil production and exports be done exclusively with US partners. In 2025, over 80 percent of Venezuelan crude exports were destined for Chinese refineries. However, Politico reported that US oil conglomerates are reluctant to invest heavily in Venezuela.
Trump had emphasized in recent weeks that the US’ main interest was control over Venezuela’s oil industry and reserves. On Tuesday, he wrote on social media that Venezuelan authorities had agreed to “turn over 30-50 million barrels” of oil to the US, in reference to the crude currently blockaded, and that he would “control” the proceeds.
On Wednesday, Trump published another social media post claiming that Caracas would only be purchasing US-made products with the oil sales revenues.
US actions have drawn domestic criticism, with Connecticut Senator Chris Murphy blasting Rubio’s “insane plan.”
“They are talking about stealing the Venezuelan oil at gunpoint for an undefined time period as leverage to micromanage the country. The scope and insanity of that plan is absolutely stunning,” Murphy told press.
Venezuelan state oil company PDVSA, for its part, issued a statement on January 7 informing of talks for the “sale of large volumes of crude to the United States.” The communiqué made no reference to the terms alleged by US officials.
“PDVSA ratifies its commitment to continue building alliances that boost national development and contribute to global economic stability,” the text read.
PDVSA added that the prospective agreement would follow a “scheme” similar to the one that currently applies to Chevron.
The US oil giant is a minority partner in four joint ventures with PDVSA. Under its present sanctions waiver, Chevron allocates crude for PDVSA to sell. However, under a previous license, Chevron would commercialize all the oil before transferring proceeds to its Venezuelan partners.
Acting President and Oil Minister Delcy Rodríguez has not commented on the US officials’ claims. In a Wednesday night televised broadcast, she said Venezuela has developed “diversified economic and geopolitical relations” all around the world.
Caracas has made repeated calls for foreign investment, including from US companies. US refineries, particularly in the Gulf Coast, are especially geared toward Venezuela’s extra-heavy crude blends. The US was the main destination for Venezuelan oil exports prior to the 2019 embargo. The Nicolás Maduro government additionally created favorable conditions for oil partners in a bid to ramp up oil production. The 2020 Anti-Blockade Law establishes mechanisms that supersede Venezuela’s hydrocarbon legislation, including concessions whereby private companies can lift more than half the crude produced.
WASHINGTON — Defense Secretary Dick Cheney predicted Thursday that the Soviet Union will withdraw all of its troops from Europe by 1995, a forecast that prompted key Senate Democrats to question whether President Bush’s new proposal for cutting U.S. forces should be faster and deeper.
As the Senate Armed Services Committee opened congressional debate on reshaping the nation’s military structure, Cheney and the chairman of the Joint Chiefs of Staff, Gen. Colin L. Powell, were repeatedly challenged on the Administration’s troop-reduction plans.
195,000 Force Level
Cheney, disclosing the Pentagon’s rough timetable for cuts in Europe, testified that it may take a year or two to carry out any U.S.-Soviet agreement on the issue.
Bush announced Wednesday night that he was recommending that each side cut its combat forces in Central Europe to 195,000, with the United States allowed to have an additional 30,000 elsewhere in Europe. Currently, the United States has 305,000 troops on the continent.
Sen. Alan J. Dixon (D-Ill.), sharply criticizing the pace of negotiations, declared that he would push the subcommittee he heads to legislate an immediate reduction of 50,000 American troops in Europe and 10,000 in Korea.
Dixon said events are overtaking negotiations, with NATO allies West Germany and Belgium already planning their own deep cuts and Soviet forces certain to be kicked out by new governments in Eastern Europe.
“I’m not saying we should strip until we’re naked,” Dixon said. “There are reasonable, moderate, fair reductions we can make.”
Later, Committee Chairman Sam Nunn (D-Ga.) applauded Bush for going beyond his proposal of last May and advocating the withdrawal of 80,000 U.S. troops, not just the 30,000 he called for then. He called it “much more relevant to the changes in Europe and to the budget realities here at home.”
But Nunn voiced strong concern when Cheney seemed to advocate keeping 225,000 U.S. troops in Europe indefinitely, despite his prediction that the Soviets would pull all of its forces out of Eastern Europe and the two Germanys would be reunited.
Nunn warned that unless the United States had plans to make substantial withdrawals in such a case, it could wind up supplying most of the ground forces for NATO as other allies disbanded their units.
The influential senator got Cheney to concede that the Administration would “take another look” at U.S. troop levels in the event of a sweeping Soviet pullback and German reunification.
Despite Cheney’s expression of flexibility, the defense secretary firmly defended Bush’s new plan. He asserted that any effort by Congress to make unilateral troop cuts before the conclusion of U.S.-Soviet arms control talks would undermine the NATO alliance and encourage greater instability in Europe.
“We are on the verge of winning one of the greatest victories in the history of the world without a shot being fired,” Cheney said. “We should not unilaterally bring them (U.S. troops) home before we get an agreement.”
Republicans Cautious
Several Republicans on the committee strongly backed that position.
“We cannot let the euphoria sweeping this nation drive us to unilateral and hasty reductions in these forces,” Sen. Strom Thurmond (R-S. C.) said.
Although members of both parties warmly pledged to work cooperatively with Cheney and Powell in the battles ahead, several Democrats served notice that they would press for deep cuts in the Administration’s proposals for increased spending on strategic weapons programs.
Sen. Edward M. Kennedy (D-Mass.) proposed a “Democratic alternative” that he said would carve a $169-billion “peace dividend” out of the defense budget over the next five years, more than quadrupling the savings proposed by Bush for the same period.
Kennedy singled out the B-2 Stealth bomber, the “Star Wars” anti-missile program and other major programs for deep slashes. He argued that Bush’s budget fails to reflect a dramatically diminished Soviet military threat and a massive upgrading of U.S. strategic weapons in the last decade.
“We have to have a modernization program,” he said, “but does it have to be at the madcap pace of the 1980s?”
Cheney, while acknowledging major changes in the world, said that the Soviets continue to modernize their own strategic arsenal. “The Soviet Union remains the only nation on earth capable of destroying the United States,” he said.
Powell likewise contended that this was no time for the nation to let down its guard.
“I never want to return to that leisurely, comfortable ‘From Here to Eternity’ attitude of the 1930s that helped invite global conflict to an unsuspecting world,” he said.
