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China has been an economic challenge for Europe for many years. But now it can become an economic disaster. China produces a large amount of cheap goods. These include products like electric vehicles, consumer electronics, toys, commercial steel with heavy subsidies. But, in the business world, most of this was for the American market.
Now US President Donald Trump has imposed tariffs of up to 145 per cent on many of these items, raising fears that Europe will be flooded with cheap Chinese goods, undermining local industries in France, Germany, Italy and the rest of the EU.
Europe caught in the trap of trade war
These EU countries now find themselves caught in the middle of Trump's escalating trade war with China. Their leaders are standing on a fine line between capitulation and confrontation, so as to avoid collateral damage.
Liana Fix, a Washington-based fellow at the Council on Foreign Relations, said the challenge has been a long time coming, but it has finally reached European capitals. There is a general trend and sentiment in Europe that at this point Europe has to stand up for itself and defend itself.
European Commission strategy
European Commission President Ursula van der Leyen has promised to engage constructively with China. However, she has warned about the indirect effects of US tariffs and vowed to keep a close watch on the flow of Chinese goods. A new task force will monitor imports to monitor dumping.
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