Europe's dilemma amid US-China trade war

There was a time when many believed that President Trump could be the reason for Europe and China to come closer together economically, but that has not happened.

The European Union is being unwillingly dragged into the confrontation between the world's two leading economies - Photo: ASPENIA ONLINE

In the context of the escalating US-China trade war and the disruption of the global trade order, the European Union (EU) is facing an increasingly clear dilemma: it wants to maintain stable relations with China, a major trading partner, but cannot turn its back on the US, a key security ally.

The more Europe tries to balance, the more it feels the limits of its ambition for "strategic autonomy".

Caught between two 'pincers'

According to the New York Times on July 6, the United States under President Trump's leadership is pursuing a tough trade policy, imposing high tariffs on all imports, regardless of opponents or allies.

Instead of treating the EU, a long-time ally, differently, Washington has applied tariffs to the bloc that are almost identical to those it has applied to China, its top geopolitical rival. This has raised concerns in Brussels that the EU could suffer “collateral damage” in the fight to regain US supply chains and industrial dominance.

EU officials are currently trying to negotiate a preliminary trade deal with the US, before the sky-high reciprocal tariffs announced by Mr Trump on April 2 officially take effect on August 1.

But to achieve that, Europe may be forced to accept sensitive conditions, including increasing pressure on China - which could further strain relations between Brussels and Beijing.

The problem is that while the EU agrees with the US that China is engaging in unfair trade practices, the bloc's ability to put pressure on Beijing is very limited.

Relations between the EU and China are not only deep economically – with German, French and Italian businesses heavily dependent on Chinese markets and raw materials – but also sensitive in terms of technology and strategic supply chains.

This makes it impossible for Europe to "cut off" or choose sides decisively, even though both Washington and Beijing are putting pressure on the EU to lean towards their side.

Can't be tough with China, can't please America

With neither a stick to use as a deterrent nor a carrot to use as a bargaining chip, the EU is being drawn into a geopolitical game between the world's two largest economies without any choice.

China quickly took advantage of this to demand that the EU relax its export controls on high-tech products - such as chip-making equipment - which were restricted by EU and US officials to prevent China from using them for military purposes.

On the other hand, Europe is not unified in its approach to China. Germany, the EU’s largest economy, has deep trade interests with China, especially in the automotive industry. But as cheap goods from Chinese companies such as Shein and Temu flood the market, many other member states are demanding tighter controls.

French people queue to shop at Shein store on June 26 - Photo: AFP

Europe’s concerns are not just economic. China’s indirect support for Russia in its war with Ukraine by continuing to buy energy and goods from Moscow has upset Brussels, especially at a time when the EU is imposing sanctions on Russia.

However, the EU has little leverage to force Beijing to change its stance.

Ahead of the summit with China scheduled for late July, expectations for a breakthrough in trade relations between the two sides are very low.

Even many EU officials could not hide their disappointment when European Commission President Ursula von der Leyen recently bluntly accused China of using a strategy of "dominance, dependence and blackmail".

Strategic autonomy: Easier said than done

The European Union once hoped that playing the role of mediator between the US and China would give it strategic and economic advantages. But the reality is that the opposite is true: the EU is becoming a target of competition and pressure from both sides, whether it wants it or not.

Unable to turn its back on the US for security reasons, but also unable to confront China directly because of economic dependence - Europe is ultimately still the passive party, always having to "clean up" the consequences of the decisions of the two power centers above.

In the game of giants, the middle man is always the most vulnerable. For the EU, the dream of “strategic autonomy” is still a long way off, and it will not be easy to escape the shadow of both Washington and Beijing.

HA DAO

Source: https://tuoitre.vn/the-kho-cua-chau-au-giua-thuong-chien-my-trung-20250707145210961.htm