EU Prepares for Potential Trade War with China Amid Rising Tensions
Quick Look
- As trade tensions with China escalate, EU officials are engaging Beijing to de-escalate while simultaneously preparing for a potential trade war to protect its industries from deindustrialisation.
- Brussels aims to acquire retaliatory tools to counter coercive trade practices.
AI-generated summary
Why It Matters
EU officials are engaging with Beijing to avoid a trade war, but are also preparing for a potential confrontation, aiming to protect core industries from deindustrialisation.
As trade tensions with China reach boiling point, EU officials are ramping up engagement with Beijing in search of an off-ramp.
Quietly behind the scenes, though, Europe is preparing for a trade war. In Brussels, a steely determination has set in to ensure the bloc’s manufacturing heartlands are not deindustrialised by the “China Shock 2.0”.
With some industries already haemorrhaging jobs, the EU’s resilience-building and de-risking plans are now laced with deterrents as Brussels looks to acquire leverage and credible retaliatory tools that would allow it to respond if China uses trade coercively.
Some analysts say the sides are already in a trade war, others think the two sides are still preparing for the inevitable storm – and some say that a trade war should be avoided at all costs.
But a question that is increasingly being asked is: could Europe actually win?
Few in Brussels share the hubris of US President Donald Trump, who in March 2018 said “trade wars are good, and easy to win”.
During a parliamentary hearing last week, the EU’s top trade enforcer, Denis Redonnet, said the purpose of engaging with Beijing was “to avoid sleepwalking at two levels”.
Open Questions
- Could Europe actually win a trade war with China?
- What specific retaliatory tools will the EU acquire?
- How will Beijing respond to EU preparations?
