This month's cover story looks at how Donald Trump's tariffs are forcing Brussels to rethink economic ties with Beijing.
For decades, the European Union and the United States have maintained a robust economic partnership, with trade in goods and services reaching €1.6 trillion in 2023. The two sides have the largest bilateral trade and investment relationship in the world — making it a cornerstone of Europe’s prosperity.
Donald Trump’s tariffs have, of course, shaken the foundations of that partnership. The EU is currently contending with a 10% ‘baseline’ levy on exports to the US, as it tries — through a combination of negotiation, appeasement and flattery — to stave off a pending 20% rate by this summer.
Regardless of whether Brussels is able to strike a deal with Trump, the US president has already engineered — however haphazardly — a seismic shift in the global trading system, leaving the EU isolated and at a crossroads. As with security and defence, the question is no longer whether the EU can count on Washington, but what happens when it can't.
In this month’s cover story, we explore how the fallout from Trump’s tariffs is pushing the EU closer to China’s orbit. From Ursula von der Leyen’s call for a “negotiated resolution” with Beijing to renewed high-level trade talks, a new, if tentative, chapter in EU-China relations could be opening.
Jasper Roctus, a fellow at the Egmont Institute, told The Parliament’s Arno Van Rensbergen and Federica Di Sario that there's now “considerable potential for co-operation between China and the EU… more than anyone could have predicted.”
But the fragile détente has also exposed fissures within the bloc. Some leaders, like Spain’s Pedro Sánchez, are advocating for a pivot to Beijing as transatlantic ties fray. Others, like Italian Prime Minister Giorgia Meloni — who has long cautioned against overreliance on cheap Chinese imports — are scrambling to shore up the EU-US partnership, no matter the costs. In a meeting at the White House last month, Meloni told Trump that her goal was to “make the West great again.”
Whether or not the EU can maintain a semblance of its trade relationship with the US, concerns abound when it comes to China’s commitment to playing by the rules. “It is hard to take Beijing’s claims to support free trade seriously, when it routinely bends the rules to subsidise its industries and distort global competition,” French MEP Christophe Grudler said.
That leaves Europe in a precarious position — caught between an increasingly protectionist US and a state-run economic powerhouse that routinely dumps its goods. And with a trade deficit of €304.5 billion with China in 2024, “economic imbalances that are the core problem of the relationship will continue to worsen for Europe,” said Jacob Gunter, an analyst at the Mercator Institute for China Studies.
Still, this moment offers an opportunity — however fragile — for the EU to help shape a new global trade framework, one that resists both coercion and mercantilism. The alternative is to be squeezed by the world’s two largest economies as they fight an unprecedented trade war. Either way, the middle ground is shrinking.
— Christopher Alessi, Editor-in-Chief