United against Trump? EU-China cooperation evolving to countering US tariffs [Advocacy Lab
Source: Euractiv
US President Donald Trump’s unleashing of a wave of protectionist tariffs jolted the global trading system. Amid rising tensions, cooperation between the European Union and China is evolving as a critical dynamic.
In his Southeast Asian tour, his first overseas trip of the year, Chinese President Xi Jinping leveraged his country’s economic strength and infrastructure diplomacy to counterbalance US tariffs.
With repeated references to “global protectionism and unilateralism” – widely interpreted as allusions to the US under Donald Trump – President Xi sought to cast China as the stable, open, and inclusive alternative.
The trip spotlighted concrete economic initiatives, including enhanced railway connectivity with Vietnam, upgraded infrastructure in Malaysia, and major investment projects in Cambodia, with each country portrayed as gaining from China’s rise.
Washington has imposed 46 per cent trade tariffs on Vietnam, 24 per cent on Malaysia, and 49 per cent on Cambodia, while China remains the most severely hit country, with trade tariffs as high as 145 per cent. The tour is precisely timed.
United against the States
In the face of ongoing US economic aggression, the EU and China share a vital interest in stabilising global trade norms, safeguarding institutions, and fostering diversified trade networks that buffer against unilateral shocks.
Both sides have continuously hinted at approaching each other with a renewed vision, with Beijing recently extending a hand of collaboration to the EU to oppose the US and its “unilateral acts of bullying”.
The bloc has also signalled a shift in its approach to China, opting to improve and balance its strategic trade and investment relations. However, Brussels insists on levelling the playing field.
In the spirit of this rapprochement, the sides are reportedly in the final stages of discussing lifting sanctions on European lawmakers. Later in the year, as this year marks five decades of diplomatic relations, a bilateral summit will be held in Beijing.
Countering the ‘Trump assault’
Despite differences, the EU and China can shape a new global economic compact. Former Greek Finance Minister Georgios Papakonstantinou argues that Europe now has no option but to get closer to China to brave what he calls the “Trump 2.0 assault on the global order”.
Papakonstantinou sees potential for collaboration in areas such as climate change. In more contentious areas like trade and tech, he advocates for balanced engagement that respects economic interdependence while acknowledging fundamental differences in values.
Former European Commissioner for Trade Cecilia Malmström sees an opportunity to revive the frozen Comprehensive Agreement on Investment (CAI), contingent on China lifting sanctions on European individuals. Although Europe needs Chinese green tech, it is wary of unfair trade practices and overdependence on critical materials.
Noah Barkin, senior advisor with Rhodium Group’s China practice, states that while Trump’s tariffs have worsened Europe’s economic vulnerabilities in relation to China, the reprieve has given the EU leverage. He suggests that access to the EU market should be conditional on China investing in Europe under strict conditions.
Limited damage
An initial assessment by the Brussels-based think tank Bruegel on the economic impact of Trump’s tariffs indicates that, while potentially serious, the shock in the EU will be manageable. Tariffs on steel, aluminium, and vehicles will remain despite the 90-day moratorium, from which only China is exempt.
Studies suggest that the US trade and GDP would suffer more than the EU’s, partly because the US depends heavily on imported consumer goods and manufacturing inputs. EU exports to the US might decline only slightly, while US exports to the bloc could fall dramatically.
Despite the risk of trade diversion from China due to high US tariffs on Chinese goods, the threat to EU industries appears limited. Most Chinese exports to the US do not compete directly with EU production, and those that do represent small portions of overall EU exports.
Although Trump’s tariffs are steep, their overall impact on the EU is relatively contained. Policymakers can mitigate regional and sectoral damage with redistributive policies, trade agreements, and domestic reforms. Trade diversion from China may even have deflationary benefits for the EU, concludes Bruegel.
Pragmatic multilateralism
Although Europe and China might appear misaligned at first glance, the preservation of the global economic order unites them. For both Brussels and Beijing, Trump’s tariff-heavy agenda threatens market access, disrupts supply chains, and undermines global trade rules.
There is an opportunity for the EU and China to work together. This does not require alignment of values – it is an opportunity to act as pragmatic partners. Both could benefit from deeper alignment on digital trade standards, green infrastructure investments, and joint efforts to keep the world integrated into the global economy.
Trump’s tariffs are more than just a bilateral issue; they threaten global prosperity. In this reality, EU-China cooperation is not a luxury but rather a necessity. The bloc must become a global actor, not just a global market, in partnership with Beijing, although on its own terms.
[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]
The original article: belongs to Euractiv .
