Trump Has Split the West and China is Seeking to Capitalize

The Chinese government is getting ready to fight back aggressively in its burgeoning trade war with the United States.  But the China’s leadership understands that it needs allies to dethrone the United States from its leadership of global trade.  That’s why Beijing is trying desperately to form an alliance with Europe.

Chinese Vice Premier Liu He has offered to open more of the Chinese market in a gesture of goodwill.  China wants to enlist the European Union — the world’s largest economic bloc — into backing it against America.  Indeed, the Chinese government has even proposed to launch a joint action against the United States at the World Trade Organisation.

This may have seemed like a far-fetched proposition in the past.  But there are now large cracks forming in the trans-Atlantic alliance.  The Trump administration has slapped tariffs on European imports.

President Trump also stated that America’s trade with the European Union (EU) is just as bad as its trade with China.  Moreover, President Trump has backed up his rhetoric with tariffs on European metals exports and threats to hit the EU’s automobile industry.  This has gone a long way in alienating many European leaders.

Europe Has Resisted China’s Overtures (So Far)

The European Union has rebuffed China’s overtures up until now.  European Union officials and diplomats have stated that the EU has declined Beijing’s offer.  This makes sense as Europe’s leadership is fairly risk averse and isn’t likely to dump its decades old alliance with America.

However, the European Union and China are set to hold a Sino-European summit in Beijing on July 16th  and 17th.  This gives the Chinese government yet another opportunity to cultivate anti-US relations with the European Union.

China is planning on dangling a carrot to entice the EU leaders at this summit.  Chinese Vice Premier Liu He has stated privately that China is ready to lay out which sectors Beijing can open to European investment.

Chinese President Xi Jinping and Premier Li Keqiang will attend the summit along with top EU officials.  The announcements made at this summit could go a long way in reshaping the global trade system.  It also has strong implications on how America’s top trade partners approach their relations with the US.

See more of our analysis here.

Please follow and like us:

Al Basoglu

I am a financial services professional with over a decade of experience in various roles. I've lived and worked abroad in 5 different countries while pursuing personal and professional challenges. My interests include markets, history and different cultures. I tend to weave all of my interest into my analysis and articles.