The fallout from Donald Trump’s trade war — even with a 90-day reprieve on some tariffs — is only beginning to be felt. But one immediate knock-on effect could be to nudge the EU closer to China’s orbit.
Less than a week after the US president announced sweeping new tariffs targeting most of its trading partners, European Commission President Ursula von der Leyen called for a “negotiated resolution” with China in a call with Chinese Premier Li Qiang on Tuesday. Von der Leyen stressed the need for Brussels and Beijing to uphold a “strong reformed trading system, free, fair and founded on a level playing field.”
Earlier this week, Chinese Commerce Minister Wang Wentao spoke with Maroš Šefčovič, the Commission’s chief trade negotiator, to explore ways to deepen economic cooperation between the two sides. Meanwhile, Spanish Prime Minister Pedro Sánchez this week urged fellow EU leaders to review the bloc’s strained ties with China.
In a meeting with Sánchez in Beijing on Friday, Chinese President Xi Jinping said the EU and China must “jointly safeguard the trend of economic globalisation and a fair international trade environment, and jointly resist unilateral and intimidating practices.”
The recent thawing of relations with China, at least rhetorically, marks a notable shift in the EU's foreign and economic policy. Only months ago, anti-China sentiment ran high in Brussels, with the 27-nation bloc cracking down on Chinese electric vehicles following an investigation into unfair competition practices.
When Donald Trump took office in January, Europeans initially hoped to team up with Washington to counter China — a country the bloc has increasingly viewed as an existential threat to its industry and prosperity. Germany’s chancellor-in-waiting, Friedrich Merz, dubbed Beijing part of an “axis of autocracies” that, along with Russia, represents an urgent danger to Europe’s liberal democracies.
But three months into Trump’s new term, there’s now “considerable potential for cooperation between China and the EU at the moment, more than anyone could have predicted,” Jasper Roctus, a fellow at the Egmont Institute, told The Parliament. He added that Von der Leyen’s call with Li would have been “unimaginable” a few months ago.
After imposing 25% tariffs on imports of EU steel, aluminium and cars earlier this year, Trump last week announced an additional 20% levy on all EU goods — above the 10% baseline tariff applied to most US trading partners. The EU scrambled to develop a set of retaliatory counter-tariffs but before it could pull the trigger Trump backtracked, announcing a 90-day pause on the 20% rate. The EU — which is still contending with the baseline 10% rate on all goods, along with the steel, aluminium and auto tariffs — also decided to pause its countermeasures to “give negotiations a chance.”
There was no such reprieve for China. Trump has now hiked tariffs on Chinese imports to a staggering 145% and, as of Friday morning, China had raised its tariff rate on US goods to 125%.
China-EU: Trade pivot?
Reversing years of strained trade relations won't be an easy feat. Brussels has long called out Beijing for heavily subsidising its export-heavy industries — including steel, aluminium, electric vehicles and batteries — to tilt the playing field in its favour at the expense of European manufacturers.
Last October, the EU imposed tariffs on Chinese electric vehicles following a year-long probe that found Beijing guilty of illicit dumping practices. The new levies came as the EU’s trade deficit with China hit €304.5 bill in 2024, according to the European Commission.
It marked a fresh low in EU-China relations, after Brussels had sanctioned Chinese officials in 2021 over human rights abuses in Xinjiang. The move prompted Beijing to retaliate with sanctions of its own, effectively freezing ratification of the long-negotiated Comprehensive Agreement on Investment (CAI).
EU divided over China policy
Still, the question of whether Europe should edge closer to China at the expense of its transatlantic ties remains highly charged in Brussels, revealing deep divisions across the continent.
While Spain’s Sánchez has forged ahead to position his country as China’s top European partner — criticising tariffs on Chinese EVs and securing billions in Chinese investments to bolster Spain’s green tech sectors — other countries may be less eager to jump on board.
Italian Prime Minister Giorgia Meloni — a close ally of Trump who has, nonetheless, criticised his tariff regime — is slated to meet the US president at the White House next week, the first European leader to do so since new levies were announced.
Meanwhile, lawmakers and diplomats in Brussels have expressed doubts about pivoting away from the US towards China.
“China is not a credible alternative,” Christophe Grudler, a French MEP from the liberal Renew group, told The Parliament. He argued that China “poses a threat to our security and democracy — from cybersecurity risks to vulnerabilities in critical infrastructure, and even interference in our public debate.”
“It is hard to take Beijing’s claims to support free trade seriously, when it routinely bends the rules to subsidise its industries and distort global competition,” he added.
Speaking on the condition of anonymity, one EU diplomat familiar with the matter told The Parliament that forging closer ties with China would be “short-sighted” and, ultimately, “detrimental” to the bloc’s long-term economic interests. “It is the same as getting out of the frying pan — depending on Russia — into the fire — depending on China,” she warned.
A second EU diplomat said that Trump’s trade offensive will make EU countries "less hawkish on China," especially now that it’s clear Europe can’t afford to alienate a country that controls many of the raw materials it critically depends on. China is the world’s largest producer of graphite, lithium and refined copper, essential components for many green technologies, from electric vehicles to renewables.
'Economic imbalances' persist between China, EU
Some experts say that a carefully managed recalibration of the EU-China relationship could serve both sides. For Brussels, pragmatic cooperation could offer a buffer against geopolitical volatility and reduce its overdependence on the US. For Beijing, closer ties with Europe could provide a crucial counterweight to Washington’s strategy of economic containment.
Trump’s unprecedented 145% tariff on Chinese imports has left Beijing eager to attract foreign investment and find new trading partners — a priority made more urgent given mounting economic headwinds.
“China is currently very afraid of relations with the EU not improving or even deteriorating further,” said Roctus. “This would mean that Beijing would no longer have any high-quality export markets left.”
But others are more skeptical of the extent to which the relationship could be reshaped.
“Economic fundamentals suggest that the economic imbalances that are the core problem of the relationship will continue to worsen for Europe,” said Jacob Gunter, an analyst at the Mercator Institute for China Studies in Berlin.
The fear is that, with the US closing its own market to ‘made-in-China,’ even more cheap goods will be rerouted to Europe, adding further pressure on already ailing European manufacturers. And while closer trade ties with China might offer temporary relief to struggling EU producers, Gunter warned that Beijing simply cannot fill the void left by a weakened transatlantic alliance.
“China is just not a big enough consumer market to fill that gap,” he said, noting that the US makes up 30% of global final consumption, while China accounts for just about 12%.
But in the short term, the EU could benefit from the escalating trade war between the world’s largest economies. The exorbitant tariff rates that China and the US have imposed on each other will make the EU’s products more competitive in both markets, at least for now.
“The net impact of this whole situation is negative for us,” Gunter said. “But European exports to both the United States and China will enjoy a comparative advantage over US and Chinese exports to each other.”
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