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European Union Reacts to US-China Trade War and Seeks to Protect Its Industry from Possible Redirecting of Chinese Products
The trade war between the United States and China has had direct repercussions in the European market. Fearing a new wave of Chinese products flooding in, European Union leaders have begun to articulate responses.
The main concern in Brussels is the diversion of these exports to the European bloc, which could harm local industries and destabilize emerging markets.
Truce with Washington, Focus on the Pacific
Meanwhile, a temporary 90-day truce between the United States and the European Union provides a brief relief. This interval allows both sides to negotiate the suspension of the US blockade on European products.
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But Washington’s attention remains focused on the confrontation with Beijing in the Pacific, a region considered the epicenter of this trade dispute.
High Tariffs and Redirecting Products
China imposes a 145% tariff on all its exports destined for the United States. This tax level practically eliminates the competitiveness of Chinese companies in the American market, which accounts for 13% of the Asian country’s exports.
With this route blocked, the European fear is that this volume of products will be transferred to the internal market of the European Union.
Víctor Burguete, a researcher at CIDOB, warns of the risks. The main one would be an increase in dumping cases: when companies sell products at artificially low prices, forcing local competitors out of the market.
He highlights that this could be particularly severe in sectors where China and Europe overlap, such as electrical machinery and equipment, among other Chinese products.
Most Vulnerable Emerging Sectors
The greatest threats, according to Burguete, lie in so-called nascent industries. These include segments such as green technologies, like battery and solar panel manufacturing.
He explains that these sectors already face strong competitive pressure from China. The arrival of even cheaper products could further complicate the consolidation of these areas within Europe.
Ángel Melguizo, a researcher at the European Council on Foreign Relations, reminds that China has a tradition of investing outside its territory.
Since the end of the last decade, Beijing has been channeling resources into sectors like solar energy, wind energy, batteries, and electric vehicles, mainly in Latin America. These investment flows are likely to intensify in light of the current economic confrontation.
Reequilibrium of Relations with China
The relationship between China and the European Union is at a delicate moment. For Brussels, China is seen both as a rival and a strategic partner. However, the escalation of the tariff war pushes Europeans toward a reassessment of their stance.
During an official visit to Beijing, Spanish President Pedro Sánchez emphasized that China should be treated as an ally. Among the topics discussed was the creation of a mechanism to track and respond to trade diversions.
The European strategy is to avoid a cycle of protectionist measures. Instead of applying retaliatory tariffs, European authorities propose actions like setting minimum prices for green products in the bloc. The intent is to protect local industries without resorting to strict barriers.
Changing Technological Perspectives
Another point raised by Burguete is the shift in interests. Previously, Europe was concerned about China’s access to its technologies. Today, with China’s advancements in green areas, the focus has reversed: Europeans seek to leverage Chinese knowledge.
An example would be the establishment of Chinese vehicle manufacturing plants in European territory, with local production and technology transfer.
Diversification Is the Way Forward for the European Union
To face the American blockade and the potential influx of Chinese products, the solution advocated by Brussels is diversification. The European Union needs to expand its trade agreements with other regions of the world.
In this context, the treaty with Mercosur takes center stage. Despite resistance from countries like France in the past, current pressure is prompting a review of positions. Spain and other supporters of the partnership are calling for urgent ratification.
Irene Sánchez, program coordinator at ECFR, believes that the approval of the EU-Mercosur agreement could help both regions avoid being dragged into the rivalry between the United States and China. For her, it is about consolidating an alternative based on multilateralism and free trade.
Together, the European Union and Latin America represent over 20% of the world’s GDP and more than 30% of the votes in the United Nations. The alliance also encompasses over 1.1 billion people and leading companies in strategic sectors such as energy, mobility, advanced industry, and biotechnology.
European Union: Trade Policy as a Tool of Values
In recent years, the European Union has begun to use its trade policy as an instrument to defend values such as human rights and sustainability.
Now, according to Sánchez, it is time to accelerate this strategy and expand global engagement. The bloc is already working on agreements with countries like Saudi Arabia, Malaysia, Singapore, India, and Indonesia.
The future of relations with the United States will depend on the stance of the next administration. But, outside of this dispute, Europe still has much to achieve.
With information from Infobae.
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