European Commission president Ursula von der Leyen and European Council president Antonio Costa will be in Beijing on Thursday for an EU-China summit that is overshadowed by disputes over market access, export controls and Russia’s war in Ukraine. Just over a week later, the United States is due to impose a 30 per cent tariff on goods imported from the EU, unless a deal is agreed before then.
When Donald Trump announced his tariffs on about 60 countries and trading blocs four months ago, they looked set to push China and the EU closer together. But relations between Brussels and Beijing have deteriorated so sharply in recent weeks that China has scaled back this week’s summit, which will now last for just one day instead of two as originally planned.
The US, which at one stage imposed a 145 per cent tariff on Chinese goods, is now negotiating with China and Trump is expected to meet Xi Jinping later this year. Washington has lifted its ban on the export of some advanced semiconductors to China and Beijing has restored the supply of rare earth magnets to the US.
For much of the 21st century, Europe could rely on Russia for energy, the US for security, and China as an export market. But Vladimir Putin’s full-scale invasion of Ukraine three years ago severed the EU’s economic relationship with Russia, Trump has brought the US security guarantee into question and China has lost much of its appetite for high-end European products.
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Most EU member-states now see Russia, which has the world’s largest nuclear arsenal, as a potentially existential security threat if it prevails in Ukraine and they are ramping up defence spending accordingly.
However, Trump’s support for Ukraine is contingent at best and could be deployed as a bargaining chip if the EU responds aggressively to tariffs by using its Anti-Coercion Instrument to target US services, intellectual property rights and foreign direct investment.
The EU’s fear of Russia, its grievances against China and its anxiety about the US’s intentions are all based in reality and Europe needs to become more self-reliant in defence while protecting its industrial base from Chinese competition. But its response to a rapidly changing geopolitical environment has too often been piecemeal, defensive and lacking in vision.
Mario Draghi’s report on competitiveness and Enrico Letta’s on the single market last year offered bold blueprints for action to combat Europe’s economic weaknesses.
The EU needs similarly fresh thinking on its place in the world, the security architecture of the continent, the future of the transatlantic relationship, the rise of China and the growing importance of middle powers such as Brazil and Saudi Arabia in an increasingly multipolar world.
