The European Union (EU) and China stand at an important crossroads. They do so now while dealing with worsening trade tensions and major geopolitical hurdles. As the U.S. under President Donald Trump’s administration implements tariffs, both the EU and China are reevaluating their positions. Now those dialogues have a new opportunity to flourish between the two. Yet, historical suspicion and deep-seated divergence remain powerful obstacles to a closer partnership.
The EU has long held China responsible for repeatedly subsidizing major industries including EVs, batteries, and steel. This practice, the EU claims, distorts fair market competition on the global stage. In response, the EU recently imposed tariffs on electric vehicles manufactured in China, reflecting its commitment to protecting European industries from perceived unfair competition. Significantly though, this move emphasizes the contentious mood of EU-China relations, which have long been marked by probes and counter-probes.
Adding to these strains are the EU’s growing worries over China’s backing of Russia during the war in Ukraine. Separately, the European Parliament has long-standing concerns about human rights violations in China. Collectively, these concerns create a climate of suspicion that undermines the very spirit of collaboration itself.
The EU-China relationship has been complicated by many unanswered questions – not least issues around overcapacity in Chinese industries. This outstanding piece has made it more difficult to find possible moments of economic sync. Both sides are obviously very sensitive to each other’s intentions, particularly where intellectual property and technological surveillance are concerned.
With rising transatlantic trade tensions, observers point out that the EU might have to take a tougher trade position toward China. Emre Peker and Mujtaba Rahman suggest that “trade diversions as the US-China tariff fight escalates will prompt the European Commission to swiftly deploy safeguard measures to prevent China—and other countries—from dumping their goods on the EU market.” They assert that “Trump tariffs will force Brussels to toughen its trade stance against Beijing beyond the current efforts to counter economic imbalances with China that threaten European industries.”
Even with these uncertainties, early signs point to the EU and China preferring to take a more constructive approach in terms of messaging. This method seeks to stop the worsening of a trade war for two reasons. This doesn’t mean close alignment of interests is coming easily or soon. Max Bergmann highlights that “the potential for EU and China economic alignment is limited as both are export-driven economies and are therefore fierce competitors, especially in the automotive and clean tech sectors.” He cautions that China needs to be prepared to make serious trade-offs. Otherwise, the EU will not get involved on a greater level.
The increasingly adversarial relations between these two great powers are made much more complex by the states of their relations with the United States. Ian Bremmer emphasizes that “the challenges between the EU and China doesn’t go away with the United States becoming an adversary.” Similarly, Bergmann posits that “China especially will see an opportunity to break up the transatlantic alliance and pull Europe closer,” suggesting that Beijing may try to exploit U.S.-EU tensions.
Carsten Nickel elaborates on this point, noting that “that has to do with unresolved questions around overcapacity in China. It has to do with ongoing misgivings in the European Parliament, especially regarding the human rights situation, and it has to do with concerns over China’s support for Russia and Ukraine.” This multifaceted backdrop renders any rapprochement between the EU and China extremely complicated.
As each side dances gingerly around one another, they’re further complicated by their various industrial policy approaches. The risk of a bad U.S. relationship could push the EU and China closer together. Don’t count on a quick partnership materializing between the two. In contrast to the potential for collaboration, Bergmann cautions that “I don’t see the EU and China uniting against the US,” reinforcing the notion that their partnerships will remain tenuous at best.
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