President Trump’s prices mean that companies in the European Union and around the world risk losing access to the world’s largest consumer market.
Naturally, they are looking for the next great thing. Statistically speaking, it would mean China.
The EU has the second consumer market in the world behind America; China is third. But China and the EU have not been exactly comfortable in recent years. Europe has regularly castigated China for too much producer and spilled artificially cheap products on the world market, and European leaders have criticized the position of China towards the Russian war in Ukraine, among other political and social issues.
However, the EU looks at 20% of prices across the United States, and even higher samples from the main products such as cars and trucks. China is faced with rates over 50%. There is a small chance that these prices can bring the two major economies closer, experts said – an involuntary consequence at a time when Mr. Trump’s America tried to weaken China.
There were the first Dégel clues. The EU imposed higher prices on Chinese manufacturing electric vehicles last year, but the Chinese Ministry of Commerce said Thursday at a press conference that the two parties had agreed to restart negotiations. Olof Gill, EU’s spokesperson for trade, said officials have agreed to “continue discussions” on electric vehicle supply chains and to set a “overview” of prices.
But there is an even greater possibility than this moment tears the EU and the more distant China. Reducing China access to American consumers could encourage its companies to send metals, chemicals and other even cheap products in the direction of Europe, aggravating concerns concerning the spill and the increase in already high tensions on other questions. Relations between the two nations could deteriorate, widening the damage while America explodes for long -standing world trade models.
“There are two ways to play,” said Theresa Fallon, analyst at the Center for Russia, Europe, Asia, studies in Brussels. “Europe is in a really difficult position.”
Europe reacts quickly to Mr. Trump’s trade war. He plans to finalize next week the first lists of goods intended for reprisal rates, and the civil servants have promised that more will come. He also tried to negotiate to get rid of prices, the EU trade commissioner should meet his American counterparts by teleconference on Friday.
If American prices are not quickly negotiated, Europe – and China – may find themselves looking for new consumers.
Another large part of the European strategy? Make new friends.
Since the end of last year, the block has worked to extend relations with India, the countries of South America, South Africa, South Korea and Mexico. He also got closer to Canada and the United Kingdom, in particular on defense issues.
However, the United States is difficult to replace with occasional commercial offers elsewhere due to the size of its consumer market: 18.8 billions of dollars in 2024, according to data from the World Bank. The EU traces about 10 billions of dollars, China at around 7 billions of dollars. America is the most important export market in the EU.
Filling a void in the form of the United States with China, although mathematically obvious, would be delicate. China and the EU have moved away from recent years, with a drop in trade flows and regular EU accusations that China uses commercial practices that distort the market.
The dilemma of Europe with regard to China has been fully exposed in the way European leaders have spoken of the Asian nation in recent months.
“We have to constructively engage with China,” said Ursula von der Leyen, who heads the EU executive branch during a speech in Davos, Switzerland, in January. It spoke of the expansion of trade and investment links “as far as possible”.
But when Mr. Trump’s pricing announcements were published this week, a stream of cheap products from Asia was an immediate concern.
“We will also closely monitor what indirect effects for these prices could have, because we cannot absorb global overcapacity, and we will not accept the spill of our market,” warned Ms. Von Der Leyen in her television response Thursday at Trump prices.
The EU and China must have a summit this year, although the details on the calendar and the location are not yet determined.
Noah Barkin, a principal researcher based in Berlin visiting the German Fund Marshall and specialist in China, said: “Trump prices are likely to divert a huge amount of Chinese exports in the EU”
“The block is likely to launch all its commercial policy tool box in Beijing in response,” he added. “It is difficult to envisage a scenario where it ends well for the Eur-Chinese relationship.”
