While many in the EU breathed a sign of relief at the apparent success of the recent Washington trade tariff talks between EU Commission President Juncker and the Trump Administration, in reality it looks more as if Washington has skillfully maneuvered the EU, especially Germany, to close the door on any possible collaboration with China on trade and economic development. While there are problems with Chinese economic policy, the recent developments suggest an EU consensus to turn away from the enormous potentials of the China-based Eurasian economic space in favor of an alliance with the USA and China-hostile Japan against the Chinese development. That could seriously damage the EU economy going forward.
For weeks prior to the latest Washington-EU talks, Beijing had been seeking a united front, initially in presenting legal WTO and other challenges to the recent unilateral US declarations of import tariffs on EU and Chinese goods. Prior to the July 16 Beijing Sino-EU Summit, Chinese officials had been in talks with various EU counterparts. They reportedly were willing to make significant concessions to open up the internal China market to EU companies in return for a united front against Washington. The official Xinhua news agency said China and Europe, “should resist trade protectionism hand in hand. China and European countries are natural partners,” it said. “They firmly believe that free trade is a powerful engine for global economic growth.”
One strategic goal of China’s Belt, Road Initiative, often called the new Economic Silk Road, is to create a land-sea network of transportation infrastructure that will eventually link China trade directly with the large EU markets. Until now Brussels has resisted while individual EU states, mostly in Eastern EU regions such as Hungary, Greece or the Czech Republic, have been open to China infrastructure investments. Until the Trump launching of unilateral trade tariffs against aluminum and steel products from EU countries in recent weeks, at the same time Washington initiated a heavy series of tariff sanctions and threats of far more to come against China, China had little opening for larger agreement with Germany and the EU as a group. The fact that Washington was targeting both China and the EU at the same time fed hopes in Beijing, naively, that China could begin close cooperation with the EU against Washington.