EYESHENZHEN  /   Opinion

The influence of Sino-US trade friction on EU

Writer: Winton Dong  | Editor: Jane Chen  | From:  | Updated: 2019-01-28

Trade conflict between China and the United States has been ongoing since March 2018. The two powerful countries have enacted tit-for-tat tariffs in the long-enduring disputes. Although some positive signs were shown in the latest round of bilateral negotiations held in Beijing this January, with the rapid increase of China’s comprehensive strength in recent years, trade tension will surely turn out to be a “new normal” for future Sino-U.S. relations.

As two of the largest economies in the world, trade conflict between China and the United States will not only hurt bilateral trade and diplomatic relations, but also greatly affect the economic, social and geopolitical stability of the whole world. At present, the United States, the European Union (EU) and China are three major powerhouses driving the global economy. The EU is China’s largest trading partner, with trade volume between the two sides rising from US$4 billion in 1978 to US$616.9 billion in 2017. China is also the EU’s second-largest trading partner only after the U.S. So it is obvious that Sino-U.S. trade conflict will greatly affect the EU as a whole.

The influence of the Sino-U.S. trade conflict on the EU is both positive and negative. On the one hand, when China and the United States are locked in a trade war, the EU will easily become an ideal alternative market for both the Chinese and U.S. exporters. For example, chemical products, transportation facilities, medical instruments and machinery are on the top of the list of Chinese imports from both the U.S. and the EU. On the other hand, the trade conflict may break the original world political order and the set balance in Europe, thus posing a danger to the economy and stability of the eurozone.

Striking a wonderful balance between China and the United States is very important for the EU to get benefits from both sides. Bolstered by the robust development of China and other Asian countries in the past decades, it is obvious that the most important global economic engine has shifted from North America to East Asia. Meanwhile, with “America First” as the core ideology, the Trump administration has excluded its Western allies out of the primary group and their interests are now subordinate to those of the superpower.

Under these circumstances, it seems that keeping sound relationships with China will offer more tangible benefits to the EU and its member nations. Despite some growing pains, China-EU relations are bearing more significance on the global level. The two sides have more common language in supporting multilateralism and improving global governance, cooperating closely in implementing the Paris climate accord, and sustaining the Iranian nuclear deal, which the U.S. has withdrawn from. The EU’s recognition and understanding of the Belt and Road Initiative are also more objective thanks to their deepening political consensus with China.

For Britain, an important country in Europe, securing healthy ties with China is of special significance, especially as the country is leaving the EU. With only two months before the British are scheduled to leave the bloc, both the EU and Britain are making efforts to reach an agreement on a withdrawal deal, making clear the terms of the separation. Frankly speaking, it is very dangerous if London drops out without an agreement. From a political perspective, no deal reflects intense confrontation between Britain and the EU. From an economic perspective, maintaining close cooperation with the EU is very important for Britain even after Brexit. However, consequences caused by a no-deal divorce will severely hurt their ties. Not only businesses and consumers, but also investors and public bodies will be negatively impacted, thus bringing uncertainty to life, employment, investment, public safety and financial stability in Britain.

Keeping close ties with China is also crucial for France, an EU member. The ongoing yellow vest campaign, the largest protest since 1968 in France, has not only shaken the political foundation of Emmanuel Macron’s administration, but also shed light on the complexity of the French reform. The unfavorable international environment has put the country in a more embarrassing situation. The U.S. unilateralism and Britain’s exit from the EU mean that France cannot rely on its traditional allies any more. If France takes the opportunity to further improve its ties with China, it will reap most tangible benefits, which will undoubtedly help Macron tide through harsh times.

It is obvious that the United States still has considerable influence on the EU. Due to their ideological similarities and common geopolitical interests, the EU and the U.S. have inborn natural ties. For example, the EU, European Parliament, European Council and the European Commission have recently reached an agreement on a foreign investment screening framework. Many say the move will have a big impact on China’s fast-growing mergers and acquisitions in Europe.

While the U.S. is leading the wave of anti-globalization, the EU should have the courage to safeguard its interests from the U.S.’s unilateral and protectionist policies. In order to gain more benefits, European leaders should take full advantage of their political wisdom to keep a wonderful balance between China and the United States.

(The author is the editor-in-chief of the Shenzhen Daily with a Ph.D. from the Journalism and Communication School of Wuhan University.)