With European countries like Germany signing deals with China, snubbing the U.S. president’s push for imposing tariffs on Chinese imports, there has been talk that the EU might consider ditching the U.S. and start working with China. However, such an analysis is deeply flawed since the EU will never be comfortable stepping over the U.S. despite inking some sweet trade deals with Beijing.
The trade deals
The talk of Europe moving closer to China comes in the backdrop of Germany signing some trade deals with Beijing in which German car manufacturers would end up as a major beneficiary. But to take such trade deals as a sign of the EU siding with China is childish since Europe is also very critical of Chinese trade practices just like the U.S. administration.
“I don’t think Europe will side with China — we have the same problems with China as the Americans do… But the E.U. does agree with the Chinese that President Trump is doing it the wrong way and has been outspokenly critical about his methods. A trade war between the U.S. and China would really put Europe on the spot,” The New York Times quotes Angela Stanza, China Expert at the European Council on Foreign Relations.
The push toward fair trade
The mistake of thinking that the EU is leaning toward China comes from not understanding what Europe’s real position on trade is and how it views U.S. tariff imposition on Chinese imports.
The EU wants China to accept the U.S. position on trade where the Chinese stop forcing Western corporations to hand over technology in exchange for business in their country. But EU wants to make this happen only by using the rules set by the World Trade Organization.
In short, while the U.S. administration is going towards a more confrontation-style approach to making the Chinese trade fair, Europe is looking for a less conflicting way to make Beijing see the sense of the trade changes asked by the U.S. And this has to do with Europe wanting to preserve the world order without causing any serious conflict.
“It is the common duty of Europe and China, but also America and Russia, not to destroy this order but to improve it, not to start trade wars, which turned into hot conflicts so often in our history, but to bravely and responsibly reform the rules-based international order… There is still time to prevent conflict and chaos,” Reuters quotes European Council President Donald Tusk in a meeting with the Chinese Premier Li Keqiang.
Though the EU’s non-confrontational policy toward Chinese trade is understandable, it should be noted that China still continues with unfair trade practices, including “stealing” technology from Western businesses and also restricting access to the domestic market. However, U.S. policies seem to have made the Chinese willing for a compromise.
A Bloomberg report quotes a market expert as saying: “If another deal [with the U.S.] is rejected it would also reflect badly on Xi… Negotiations are about who has the upper hand. If you’ve been rejected once and then you approach the other party again, it makes you look weak.”
A few officials also stated that Xi’s administration wants to cut a deal with the U.S. as soon as possible, and are considering agreeing to U.S.demands for respecting the intellectual property rights of its tech companies. As such, it should be clear to the EU that the U.S. moves, however, “threatening” they may seem to the world order, is actually the only thing that seems capable of making the Chinese trade fairly.