Why Trump's tariffs China and Europe won’t bring closer

It is unlikely that China and the European Union will quickly grow to be close allies.

“I don't see the EU and China against the USA,” said Max Bergmann, director of Europe, Russia and Eurasia on the Center for Strategic and International Studies (CSIS).

At the geopolitical level, the 2 powers may very well be open to more commitment, but economic clashes and existing questions related to trade and competition are a significant hurdle, he explained.

“The potential for the economic orientation of the EU and China is limited because both export-oriented economies are and are therefore violent competitors, especially in the automotive and clean tech sector,” said Bergmann.

“I think there will be interest on both sides, but deep practical restrictions for both. If China is not ready to make some major concessions, I have difficulty combining the EU behind a strategy of deeper engagement.”

The EU and China have a brittle relationship. While China is considered one of the most important trading partners within the EU next to the United States, economic relationships between the 2 have also been characterised prior to now by investigations and tit-for-deed measures in reference to trade.

The EU has long claimed that Beijing subsidizes vital sectors resembling electric vehicles, batteries in addition to steel and aluminum in a way that’s harmful to global markets and competitiveness. Last yr the EU CHINA met with tariffs on electric vehicles.

In the steps considered retaliatory measures, Beijing then began against pork and brandy against EU exports from the EU and an anti-subsidy investigation by EU milk products.

And it isn’t just the trade that causes tensions within the EU China relationship, Carsten Nickel, Managing Director at Teneo, told CNBC.

He added that there have been “fundamental differences” between the 2 “regardless of what is going on with the USA” “

“This has to do with unresolved questions on overcapacity in China. It has to do with persistent concerns within the European Parliament, especially with regard to the human rights situation, and it has to do with concerns about China's support for Russia and Ukraine,” he said.

Ian Bremmer, founder and president of the Eurasien Group, also pointed out that there is a “deep” European distrust of China in areas such as intellectual property and technological surveillance and industrial policy.

This “doesn’t disappear that the United States will grow to be an opponent,” he told CNBC.

However, China could try to take the opportunity to solve the US-EU compounds in order to build a closer bond with the EU, said analysts.

“China will specifically have the chance to interrupt open the transatlantic alliance and to attract Europe closer,” said CSIS 'Bergmann.

On the other hand, some Europeans may imagine “securing security between the United States and China and maybe to scale back their support for the Russian defense industry and open it economically,” he added.

China and the EU appear to have been drawn closer recently.

It was reported on Thursday that the 2 planned to cope with the attitude Minimum prices for Chinese electric vehicles Instead of the EU tariffs. Spanish Prime Minister Pedro Sanchez Chinese President Xi Jinping met in Beijing on Friday and then called for a more balanced relationship. The Chinese Foreign Minister Wang Yi also attended Europe at the beginning of this year and campaigned for closer relationships and deeper cooperation.

At the beginning of this week, the President of the European Commission, the President of the European Commission, and Chinese Prime Minister Li Qiang spoke by phone – although the EU chief “emphasized the critical role of China in combating customs dividing” and pretended to work on a negotiated solution for the questions caused by Tahr. Advertisement proposed by the European Commission.

The language that was used around the call from the European side appeared “softer” than in the past, according to Teneos Nickel.

Ultimately, however, Nickel says: “The focus is on the administration of this very difficult situation for the worldwide economy.”

Nickel said that this does not mean that the underlying challenges in the European relationship with China have disappeared overnight.

The US tariff campaign could even make things between China and the EU more difficult, nickel suggested that it could worsen existing problems such as the overcapacity of the Chinese export.

Emre Peker Peker and Mujtaba Rahman of the Eurasia Group repeated this idea in a Thursday notice.

“Commercial diversions If the US China tariff's tariff fight escalates, the European Commission is prompted to make use of protective measures to stop China's and other country quickly to empty their goods on the EU market,” they said.

Regardless of this, Trump tariffs will force Brussels to tighten his trade attitude against Beijing that go beyond the current efforts to counteract economic imbalances with China that threaten the European industries, “said the analysts of the Eurasien Group.

At the identical time, European political decision -makers will use “softer rhetoric” towards China to avoid that a trade war is triggered on two fronts. “However, it is highly unlikely that it translates into the Brussels cooperation against Washington,” she concluded.