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    Home»World Economy

    China seeks reset with EU amid Donald Trump’s trade war

    Team_NewsStudyBy Team_NewsStudyApril 17, 2025 World Economy No Comments7 Mins Read
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    Chinese language officers and companies are looking for a rapprochement with the EU amid Donald Trump’s commerce battle, however the bloc stays deeply sceptical of turning into a dumping floor for items diverted from the US.

    Beijing is trying to deepen ties with the world’s largest buying and selling bloc with the hope of discovering different markets for its items within the face of steep US tariffs. China has dispatched commerce delegations to European capitals in current weeks and factories are exploring rerouting items to the continent’s markets.

    EU leaders have additionally publicly expressed the necessity for higher co-operation, a powerful distinction to earlier declarations stating a must “de-risk” provide chains from Beijing.

    However a reset in EU-China ties would want to beat deep variations over China’s big commerce surpluses, the boundaries to accessing its personal market and Beijing’s tacit assist for Russia’s battle in Ukraine.

    “It’s time for China and Europe to start out over,” stated Zhang Yansheng, a senior researcher on the state-run China Academy of Macroeconomic Analysis think-tank.

    Trump’s tariff upheaval “offers us the chance to rethink our commerce relationship — China ought to export extra to Europe and import extra as effectively”, he added.

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    Trump has imposed new tariffs of as much as 145 per cent on Chinese language exports, threatening to curtail the movement of commerce between the world’s two greatest economies. Beijing has retaliated with 125 per cent tariffs.

    The EU, in the meantime, has been hit by 10 per cent tariffs, which might improve to twenty per cent if talks fail to accommodate Washington’s calls for.

    Trump’s chaotic manoeuvring has set off a flurry of outreach between Beijing and Brussels, as either side search a counterpoint to the US.

    Chinese language chief Xi Jinping advised visiting Spanish Prime Minister Pedro Sánchez final week that China and the EU ought to “collectively resist unilateral bullying”.

    Even European Fee president Ursula von der Leyen, who has been a proponent of “de-risking”, told Chinese premier Li Qiang last week that the 2 sides ought to work collectively to offer “stability and predictability” for the worldwide financial system.

    “Each want different markets in addition to a way of stability,” stated François Chimits, an economist on the Mercator Institute for China Research. “Tactically, a transfer in the direction of extra bilateral co-operation between these two financial heavyweights expands their potential leverage in any talks with the US as effectively.”

    Xi Jinping, on the right, gestures as he walks alongside Pedro Sánchez
    Chinese language President Xi Jinping, proper, met Spanish Prime Minister Pedro Sánchez in Beijing final week © Andres Martinez Casares/AP

    China’s commerce ministry has despatched commerce delegations in current weeks to occasions in Stockholm, Budapest, Oslo and Hanover to drum up curiosity in investing in China, the place overseas corporations have complained of boundaries to market entry.

    Peter Burnett, chief government of the China-Britain Enterprise Council, famous that Beijing despatched a big delegation to an “Spend money on China” occasion this month at London’s Queen Elizabeth II Centre. “For worldwide enterprise, China is saying you might be welcome and we wish you to do extra,” he stated.

    Chinese language producers and exporters are additionally trying to patrons in European markets for his or her wares. “We’re working onerous to increase our enterprise in Europe and elsewhere — and we’re making progress,” stated a supervisor at Petpal, a serious Chinese language pet-food maker.

    The US tariffs will speed up the “development of Chinese language corporations going international”, stated Jaromir Cernik at CTP, an enormous investor in European industrial property. He added that Chinese language demand for manufacturing facility and warehouse area in Europe was rising.

    However a European enterprise determine aware of the Chinese language delegations stated EU governments had little to supply, as many corporations have been reluctant to spend money on China. An EU Chamber of Commerce in China survey final yr discovered that more than a quarter of respondents were pessimistic about their progress potential in China and 44 per cent about their profitability.

    Weak home consumption in China has additionally created deflationary pressures, intensifying value competitors and making the nation a much less engaging marketplace for overseas corporations.

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    Any détente would even have to beat important frictions. The EU has criticised China over its alliance with Russia and backing of Moscow’s invasion of Ukraine. Belgium is investigating Huawei, the Chinese language telecoms champion, for allegedly bribing members of the European parliament, allegations it denies.

    Xi can also be planning to snub a summit marking 50 years of bilateral ties, whereas forcing von der Leyen and European Council president António Costa to journey to Beijing in July for a gathering that was because of happen in Brussels.

    However the Chinese language chief will attend a Victory Day parade in Moscow marking 70 years because the finish of the second world battle.

    China’s exports to the bloc have been greater than double its imports final yr, and EU leaders have accused Beijing of cultivating industrial overcapacity to offset financial weaknesses at residence, flooding the continent’s markets with low-cost items and undercutting homegrown business.

    Von der Leyen final month echoed Trump’s issues about commerce deficits, saying some international locations have been “taking unfair benefit of the present guidelines”.

    The EU has opened commerce defence investigations into items starting from electrical autos to plywood, some leading to tariffs of greater than 100 per cent. Beijing has hit again with probes focusing on EU pork, cognac and dairy merchandise.

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    “Europe’s relationship with Beijing has been plumbing new lows because of rising commerce imbalances, China’s assist for Russia and an increase in Chinese language cyber assaults throughout Europe,” stated Noah Barkin of the Rhodium Group consultancy. “It’s troublesome, given this backdrop, to ascertain some form of détente between Brussels and Beijing.”

    But when commerce talks with the US fail to dealer any reprieve from tariffs, the EU “might resolve that even a foul cope with Beijing is preferable to a two-front commerce battle with each the US and China”, Barkin added.

    Von der Leyen recently told the Financial Times that the EU would “take safeguards” in opposition to dumping, including that Li had promised to take steps to assist home consumption and absorb extra manufacturing.

    China and the EU have additionally agreed to step up high-level dialogue and negotiations to resolve levies on Chinese language electrical autos.

    Beijing can rely on some German corporations with a big footprint in China to again nearer ties. A coverage paper circulated amongst German company representatives in China this week known as on the incoming authorities in Berlin to “play a extra energetic position” in supporting their enterprise pursuits within the nation.

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    Montage featuring a 2025 BYD vehicle and a 2006 Mercedes

    Freight costs level to early indicators of a commerce reordering. The Ningbo Containerised Freight index confirmed charges to the US west coast plunged 18 per cent for the week till April 11 from the week earlier than, whereas costs to the Mediterranean rose 15 per cent.

    Zhang on the Academy of Macroeconomic Analysis stated there was a “massive misunderstanding” final yr between China and the EU, noting {that a} delegation he attended had obtained a cool reception.

    “[Europeans] have been taking a look at China with a biased perspective, they needed ‘de-risking’ from China’s industrial and provide chains,” he stated, although he conceded that the Chinese language facet was “flexing our muscle tissues an excessive amount of”.

    “China and Europe must re-understand one another,” he stated.

    Further reporting by Nian Liu and Wenjie Ding in Beijing and Florian Müller in London. Knowledge visualisation by Haohsiang Ko in Hong Kong



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