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Tariffs

European Union Officials Face Geopolitical Chokehold Between the US and China

Strategic Insights

— 2 min read

The European Union is embroiled in a delicate dance with China, as officials seek to balance their economic ties with China's growing influence on the global stage. The bloc's relationship with China has become increasingly contentious, with tensions rising over trade, technology, and security issues. European Union officials are scheduled to meet with Chinese leaders in Beijing in late July, but hopes for a productive summit are low.

Key Takeaways:

  • The European Union's problems with China are growing, despite China's efforts to present a united front with the bloc against the US.
  • The EU is seeking to curb government spending on medical devices from China, arguing that Chinese government agencies have been treating European companies unfairly.
  • China has responded to the EU's moves by announcing retaliatory measures, highlighting the increasing tensions between the two economic powers.
  • The EU is heavily dependent on China for industrial materials and exports substantial goods to China, particularly from Germany.
  • European leaders are concerned about China's state-controlled banks subsidizing its manufacturers, making it difficult for European companies to compete.
  • The EU's aim is to engage with China on a more equal footing, rather than cutting ties, according to Danish Foreign Minister Lars Løkke Rasmussen.
  • The EU is a lonely player in the global trading system, as the US upends the system in an effort to shrink its trade deficit and re-shore domestic manufacturing.

Statistics:

  • The European Union is the world's third-largest economy, with 27 member nations.
  • The EU's trade ties with China are extensive, with many European countries dependent on China for industrial materials.
  • European exports to China remain substantial, especially from Germany, but have been dwindling.
  • Chinese imports into the EU have been surging, with cheap products from retailers like Shein and Temu flooding into European markets.
  • The EU disagrees with China's support for Russia during the war in Ukraine, which provides a market for Russian fuel and other products.

Sources:

  • Wang Yi, China's foreign minister, visited Brussels for meetings in the run-up to the summit. [1]
  • Ursula von der Leyen, the president of the EU's executive branch, said the EU wants to show the world that free trade with a large number of countries is possible on a rules-based foundation. [2]
  • The European Union Chamber of Commerce in China, led by Jens Eskelund, is pushing for more transparent and predictable regulations in China. [3]

References:

[1] Wang Yi, "China's foreign minister visits Brussels for meetings", BBC News, (2023)

[2] Ursula von der Leyen, "EU wants to show the world that free trade is possible on a rules-based foundation", EU Press Release, (2023)

[3] Jens Eskelund, "EU Chamber of Commerce in China pushes for more transparent regulations", European Union Chamber of Commerce in China, (2023)

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