Because of Donald Trump, Japan and Europe Signed Their Most Important Free Trade Agreement Ever

As President Donald Trump launches a trade war with China and imposes tariffs on goods coming from countries such as Canada, Mexico and Germany, two traditional U.S. allies have chosen to demonstrate their commitment to open, free trade.

On Tuesday, Japan and the European Union signed the biggest trade deal in their history, nearly eliminating all tariffs between the Asian nation and the bloc's 28 member countries. Dubbed the "Economic Partnership Agreement," the new trade deal will account for almost a third of the world's GDP. It is widely viewed as a rebuke of Trump's protectionist trade policies.

"With the signature of the Economic Partnership Agreement with Japan we are making a statement about the future of free and fair trade. The agreement puts fairness and values at its core. There is no protection in protectionism—and there is no unity where there is unilateralism," Jean-Claude Junker, president of the European Commission, wrote on Twitter Tuesday.

European Council President Donald Tusk, meanwhile, described the agreement as "the largest bilateral trade deal ever."

The new trade deal will open the Japanese market to European agricultural exports, giving European farmers access to around 127 million new consumers. Europe currently exports dairy products to Japan, and the bloc is expected to increase the number of processed foods it exports to the country, which is the world's third-largest economy after the U.S. and China. Japan is expected to increase the number of cars and seafood it exports to Europe.

"We are sending a strong signal to the world that two of its biggest economies still believe in open trade, opposing both unilateralism and protectionism," Cecilia Malmstrom, the European Union's commissioner from trade, said in a statement. "The economic benefits of this agreement are clear. By removing billions of euros of duties, simplifying customs procedures and tackling behind-the-border barriers to trade, it will offer opportunities for companies on both sides to boost their exports and expand their business."

The agreement was signed in Tokyo by Japanese Prime Minister Shinzo Abe and representatives of the European Union.

The U.S. had previously considered singing a large trade agreement with Japan and other Asian countries known as the Trans-Pacific Trade Agreement (TPP), but Trump nixed the agreement as soon as he came to office. Since then, he has imposed tariffs of between 10 and 25 percent on aluminum and steel imports and most recently hit around $200 billion worth of Chinese goods with 10 percent tariffs. The European Union responded to Trump's tariffs on steel and aluminum by imposing its own tariffs of 10 percent on U.S. exports like bourbon whiskey and Harley Davidson motorcycles.

Trump's ongoing trade war has also pushed Beijing closer to Europe.