The financial turmoil triggered by the China and has contributed to the transformation of American policy, it is now hitting Europe.
According to Axios, the «intensity» which the European Union accepts Industry It strengthens pressure, prompting the old continent to adopt a tougher attitude towards China, which it has been resisting to date. This is the next major test of whether the explosive increase in Chinese Exports It will also push other major economies towards a more protective trade policy: that is, the approach the US has adopted for years.
Europe is now seriously discussing whether and to what extent it should follow the American model, imposing wider restrictions and barriers on Chinese products.
European politicians are forced to reconsider their stance
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«The concept of «Chinese shock» It's getting more and more global.», the former EU Trade Commissioner Cecilia Malmström told Axios, referring to the sharp increase in Chinese imports following China's accession to the World Trade Organisation in 2001, which hit several American branches of processing and entire local communities.
«What happens in European industry - with tens of thousands of jobs in manufacturing in Germany disappearing every month - forces politicians to reconsider their attitude. We are really at the beginning of this process.», says Noah Barkin, senior consultant to the research firm Rhodium Group.
«They would love to have a tool like Customs duties...and would love to get the green light from the member states to use it», adds Barkin, referring to the American trade legislation used to impose large-scale duties on China and other trading partners.
The problem
Chinese factories produce goods at a much faster rate than the country's subdued domestic economy can absorb. This results in a massive wave of exports, which exerts unprecedented pressure on critical sectors of the European economy. Chinese manufacturers can often underestimate their European competitors at prices, aided in some sectors by extensive state support.
The pressure is particularly strong in Germany, whose economy was partly built in the sale of cars, machinery and other high-quality products in China. Chinese competitors are now gaining market share in many of the same industries that fueled Germany's economic success.
It is noted that US duties have not slowed China's export machine very much. Exports reached the record level of 3.8 trillion dollars last year and have increased by 14% by July of this year, even as missions to the US have collapsed.
China has regained ground elsewhere, including Europe – although the European Central Bank says Trump's tariffs only explain part of the wider increase in exports.
There are also three important elements:
- Europe accumulates trade deficits with China, with a record rate of about $1.15 billion a day, which is what the leading EU trade official. calls «clearly unsustainable».
- Germany now buys more high-tech machinery and equipment from China than it sells there: it is a reversal of a ten-year pattern. Her trade balance in these goods changed to a $600 million deficit from a $900 million surplus to less than a year, according to WSJ.
- Imports of cars into the EU from China exceeded 1 million for the first time last year, with an increase of about 30% from 2024, according to the Association of European Car Manufacturers.
How Europe Will react
Europe is already trying to act, with tariffs on Chinese electric vehicles and new obstacles to industries from steel to medical aid.
Officials are considering going further, including new powers to quickly impose duties or quotas on Chinese products, similar to the tools used by the US.
Volkswagen, which opposed EU tariffs on Chinese electric vehicles two years ago, is now pushing European policy makers to move faster to protect the industry from Chinese competition.
«We don't have time to waste», CEO Oliver Blume told investors last month, adding that he expects European policy makers to act this year.
As the head of Germany's largest car industry is pushing for greater protection from China, Barkin of the Rhodium Group notes that «This is a message that we have reached a new level».
So the U.S. reacted to China’s economic growth, placing increasingly wide trade barriers. Europe now faces the same question, but it is not clear at all that it is willing to go that far. «Crashing China with high tariffs is not the European style», Malmstrom points out.
