\n<\/p>\n
China has for years presented an economic challenge for Europe. Now, it could become an economic disaster.<\/p>\n
It produces a vast array of artificially cheap goods \u2014 heavily subsidized electric vehicles, consumer electronics, toys, commercial grade steel and more \u2014 but much of that trade was destined for the endlessly voracious American marketplace.<\/p>\n
Now, with many of those goods facing an extraordinary wall of tariffs thanks to President Trump, fear is rising that more products will be dumped in Europe, weakening local industries in France, Germany, Italy and the rest of the European Union.<\/p>\n
Those nations now find themselves trapped in the middle of Mr. Trump\u2019s spiraling trade war with China<\/a>. Their leaders are straddling a fine line between capitulation and confrontation, hoping to avoid becoming collateral damage.<\/p>\n<\/div>\n<\/div>\n \u201cThe overcapacity challenge has taken a long time, but it has finally arrived in European capitals,\u201d said Liana Fix, a Washington-based fellow at the Council on Foreign Relations. \u201cThere is a general trend and a feeling in Europe that in these times, Europe has to stand up for itself and has to protect itself.\u201d<\/p>\n Ursula von der Leyen, the president of the European Commission, has promised to \u201cengage constructively\u201d with China even as she has warned about the \u201cindirect effects<\/a>\u201d of the American tariffs and has vowed to closely watch the flow of Chinese goods. A new task force will monitor<\/a> imports for signs of dumping.<\/p>\n \u201cWe cannot absorb global overcapacity nor will we accept dumping on our market,\u201d Ms. von der Leyen said as Mr. Trump\u2019s tariffs went into effect.<\/p>\n Her tough but measured message to both China and the United States has impressed trade experts who say it may be the best chance for Europe to avoid economic disaster. Janka Oertel, the director of the Asia program at the European Council on Foreign Relations, called it a \u201csober\u201d response to the threat from Beijing.<\/p>\n<\/div>\n<\/div>\n \u201cThey continue to stand their ground on China, because otherwise they lose it,\u201d she said.<\/p>\n But the high stakes moment is testing the continent\u2019s unity.<\/p>\n<\/div>\n<\/div>\n Pedro S\u00e1nchez, the Spanish prime minister, last week traveled to Beijing to meet with President Xi Jinping, urging greater engagement with China as a hedge against U.S. tariffs. His outreach, captured visually<\/a> in a handshake with the Chinese leader, came even as Ms. von der Leyen and the leadership of the European Commission, the bloc\u2019s executive branch, continue to demand assurances from Beijing that the dumping would not accelerate.<\/p>\n Germany last year opposed<\/a> higher electric vehicle tariffs imposed by the European Union, afraid that China would raise taxes on its own car industry. In Britain, no longer a member of the bloc, Prime Minister Keir Starmer has called for \u201cconsistent, durable, respectful\u201d relations with China as he struggles to jump-start his country\u2019s sluggish economy.<\/p>\n \u201cThe worst-case scenario is high U.S. tariffs\u201d while at the same time \u201cChina is flooding the European market,\u201d said Noah Barkin, a senior adviser for the Rhodium Group, a policy research organization. He said that would be \u201ca double whammy for European industry. That is what Europe wants to avoid.\u201d<\/p>\n Leaders who argue that closer ties with China may be part of the answer, like Mr. S\u00e1nchez in Spain and Mr. Starmer in Britain, have found it to be a politically winning message at a time when their countries are eager for more foreign investment.<\/p>\n<\/div>\n<\/div>\n Announcements of a new Chinese factory that will eventually create thousands of jobs are popular at home. But at times, that eagerness can threaten to undercut a consistent, European message on trade.<\/p>\n<\/div>\n<\/div>\n \u201cSpain sees things very differently from Poland,\u201d said Theresa Fallon, director at the Center for Russia, Europe, Asia Studies in Brussels. \u201cThere\u2019s an ongoing debate in Europe about what their stance toward China should be.\u201d<\/p>\n But trade experts say the economic relationship between Europe and China is rooted in a decades-old reality: a Chinese marketplace that is effectively closed to many European companies because of regulatory burdens and the Communist Party\u2019s buttressing of Chinese companies<\/a>. The European trade deficit with China<\/a> was nearly $332 billion (\u20ac292 billion) in 2023.<\/p>\n The E.U. leadership describes China as a \u201ca systemic rival<\/a>,\u201d and relations with the Asian nation have soured in recent years for a host of reasons, including China\u2019s support of Russia<\/a> as it wages war on Ukraine.<\/p>\n<\/div>\n<\/div>\n Recent conversations between top European commissioners and their Chinese counterparts have contained blunt warnings from the European side.<\/p>\n \u201cCurrent E.U.-China trade relations remain unbalanced,\u201d the European Commission said in a statement after Maros Sefcovic, the bloc\u2019s trade commissioner, visited Beijing<\/a> to discuss market access. The statement hinted at tensions during the visit, saying that China and Europe have a widening trade deficit \u201cfueled by illegal subsidies.\u201d<\/p>\n European officials have for years demanded concessions from China that include voluntary restraints on the shipment of cheap goods and minimum prices to offset large government subsidies that European businesses charge are unfair.<\/p>\n Meanwhile, Chinese officials have seemed eager in recent days to paint Europe as an increasingly close trading partner. China\u2019s readout after Mr. Sefcovic\u2019s visit to Beijing had little mention of hard talk. It said that<\/a> Mr. Sefcovic had described China as \u201can important partner\u201d and that the two economies would \u201cjointly resist unilateralism and protectionism.\u201d<\/p>\n<\/div>\n<\/div>\n And after Mr. Trump\u2019s April 2 tariff announcement, China\u2019s Commerce Ministry said it had agreed to restart negotiations<\/a> with the bloc over Europe\u2019s higher tariffs on Chinese-made electric vehicles.<\/p>\n When asked about that announcement, European officials struck a more muted tone. Olof Gill, an E.U. spokesman for trade, said officials had agreed to \u201ccontinue discussions\u201d on electric vehicle supply chains and take a \u201cfresh look\u201d at pricing.<\/p>\n China\u2019s push has at times been more overt. The Mission of China to the European Union has run a series of sponsored articles on the website Euractiv, a prominent source in Brussels policy circles. The articles focus on how China and Europe might draw closer together<\/a>. \u201cWith a hurricane blowing through Washington, China is looking more like a strategic partner for Europe,\u201d one declared<\/a>.<\/p>\n For now, the European Union has made little show of embracing that \u2014 instead pushing China to reach a deal with the United States, hoping to avoid the fallout if it fails to do so.<\/p>\n An E.U.-China summit is set to take place this year, potentially in the second half of July.<\/p>\n \u201cI think basically Europe is just hoping to make it into summer with everything intact, more or less, and to not have the economy crashed,\u201d Ms. Fix said. \u201cTo sort of land the plane until the summer, and then to prepare for what comes next.\u201d<\/p>\n<\/div>\n<\/div>\n