LDN Business - EU | China Trade

Reeling from Trump rebukes, Europe weighs deeper ties with China

[June 27, 2025] By DIDI TANG and SAM McNEIL

BARCELONA, Spain (AP) — Jilted, betrayed, dumped, or defiant. It's hard to describe the European Union after relentless attacks from its once-dependable ally, the United States. The threat from Donald Trump's second administration against Greenland, its sweeping tariff plans and courtship of Moscow have firmed up some European leaders’ vows to reduce their reliance on America.

That has not gone unnoticed in another global power. China hopes for a Europe detached from the U.S. and is sensing an opportunity now to divide the West. For the past several years, the EU moved in lockstep with Washington to levy tariffs on Chinese electric vehicles and sanction Chinese officials accused of rights violations.

Now, locked in a trade war with Washington that may be prolonged, Beijing sees the 27-nation bloc as a desirable partner in blunting the impact from Trump’s tariffs and to maintain its strong global position.

But for EU leaders, meeting Thursday in Brussels to discuss China among a host of regional and global issues, managing ties with Beijing is no easy matter.

An upcoming summit in China in July to mark 50 years of ties might offer the first hint of new consensus between these two global behemoths.

Europe's hopes for China

The EU-China economic ties are hefty: bilateral trade is estimated at 2.3 billion euros ($2.7 billion) per day.

China is the EU’s second largest trading partner in goods, after the United States. Both China and the EU believe it is in their interest to keep their trade ties stable for the sake of the global economy, and they share certain climate goals.

Like the U.S., Europe runs a massive trade deficit with China: around 300 billion euros last year. It relies heavily on China for critical minerals, which are also used to make magnets used in cars and appliances. As European companies are seeing declining profitability in China, Brussels is hoping Beijing will follow through on recent pledges, like one announced Thursday by the Ministry of Commerce, to ease restrictions on foreign business ventures.

“While other opened their market, China focused undercutting intellectual property protections, massive subsidies with the aim to dominate global manufacturing and supply chains,” said EU Commission President Ursula von der Leyen at the G7 meeting in Canada. “This is not market competition – it is distortion with intent."

Now, Europe, already fretting over the trade deficit, worries that Trump's tariffs could divert even more Chinese goods to Europe, destabilizing markets across the continent.

Such vulnerabilities could strengthen Beijing's negotiating position, said Alicia Garcia-Herrero, a China analyst with the Brussels-based Bruegel think tank.

“China has built so many strategic dependencies that the EU is trapped in an asymmetric relationship,” she said, and Beijing could leverage them to “get a deal in July" at the summit.

Beijing's new strategy for Europe

Analysts don’t expect a grand bargain at the summit, but China will likely demand the EU lift tariffs on Chinese electric vehicles or even reopen the bilateral trade treaty, the Comprehensive Agreement on Investment. Either or both would send a powerful signal to Washington.

But China's main goal is ensuring the EU remains an accessible and affluent market for goods that might not reach the U.S. because of Trump’s tariff blitzkrieg. Despite a truce in the trade war, Chinese businesses are widening their global reach to be less dependent on the U.S.

Regardless of any deal, the summit itself will be the message, said Noah Barkin, an analyst of Europe-China relations at the German Marshall Fund think tank. For the EU, the main goal would be for von der Leyen to meet Chinese President Xi Jinping, he said.

Whereas she was “treated rather shabbily” on a 2023 trip to Beijing, Barkin said the Chinese this time will probably “roll out the red carpet," keen to see “pictures of Chinese and European leaders walking through gardens and sending a message of unity.”

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Containers are stored at a container terminal in Duisburg, Germany, the day after President Trump announced new tariffs for the EU and the rest of the world, Thursday, April 3, 2025. (AP Photo/Martin Meissner, File)

Sun Chenghao, head of the U.S.-EU program at Tsinghua University’s Center for International Security and Strategy, expressed hope “that the future of China-Europe relations can be more independent on both sides.”

“For Europe, that would mean shaping its China policy based on its own interests, rather than simply taking sides,” Sun told the German Marshall Fund in a podcast. “And for China, this means building a more independent and nuanced approach to Europe.”

“It is precisely because most European decision-makers realize the necessity of strategic autonomy that they have made it clear that they must strengthen cooperation with China," said Yan Xuetong, dean of the Institute of International Relations at Tsinghua University, to The Paper, a Shanghai-based news site.

"Even if China and Europe have differences on the Ukraine issue, there is still room for expanding cooperation in areas beyond the differences.”

Obstacles in EU-China ties

China’s deepening ties with its historic allies in Europe like Hungary and Greece stand alongside fears across the continent about its human rights record, espionage, trade policies, military buildup and support for Russia.

European police arrested employees of the Chinese tech giant Huawei during an ongoing bribery investigation in Brussels. Czech intelligence services have claimed Beijing directed cyberattacks on its critical infrastructure. And the EU’s criticisms of China’s human rights violations remain unabated.

Russia’s invasion of Ukraine has further disaffected Europe from China. Despite Beijing’s claims of neutrality, Europe largely sees China as complicit in, if not covertly supporting Russia’s war machine.

The EU recently cancelled a high-level economic and trade dialogue with China, due to a lack of progress on trade disputes. It also has moved to restrict Chinese participation in EU medical devices procurement.

U.S. warns Europe not to get closer to China

U.S. Treasury Secretary Scott Bessent has called out Spain for its courtship of China, warning that countries seeking to get closer to China would be “cutting their own throat” because Chinese factories will be looking to dump goods that they can’t ship to the U.S.

By decoupling their positions on China, analysts say both Brussels and Washington have weaker hands dealing with Beijing. And that might hurt the U.S., which has vowed to prevail over China and retain its global dominance but, as many believe, needs help from its allies and partners.

“If we could just get Japan and the EU and the U.S. together on any issue, ... we could outweigh the Chinese at the negotiating table,” said Nick Burns, the U.S. ambassador to China in the Biden administration. “President Trump, I think, because of his inattention to our allies and maybe even worse, his sometimes just acrimonious behaviors towards allies, has given away that leverage.”

Joerg Wuttke, former president of the EU Chamber of Commerce in China and now a partner at DGA-Albright Stonebridge Group in Washington, argued that the fundamentals underlining EU-China relations have not changed as long as China does not take genuine steps to open its market and that the EU remains “geared towards” the U.S., though he described Washington as a “major backdrop noise.”

“We are not allies. We are trading partners,” Wuttke said of EU and China. “And, so from my point of view is, what is there to worry for the United States?”
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Didi Tang reported from Washington.

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