The chances of a trade war between the European Union and China are far higher than most Europeans realise. In the corridors of Brussels, insiders have theories to explain this calm. One involves a Trump effect: political and business leaders spend too much time reacting to provocations from Donald Trump and his team. Chinese bullying is discreet. If Xi Jinping shared his darkest thoughts on social media, more leaders might realise that, compared with America, China is a more urgent threat.
There is complacency on China’s side, too. To prosper, Chinese exporters need the EU’s 450m consumers, especially as America walls itself off. Yet Chinese officials shrug off European pleas to tackle trade imbalances. Those now run at €1bn ($1.18bn) a day in China’s favour amid surging Chinese exports to Europe and slumping EU sales to China. A stream of visiting European leaders have warned Mr Xi that China’s state-backed manufacturing juggernaut poses an intolerable threat to industries in their home countries. Unless China changes course, Europe too will have to close itself off, is their co-ordinated message.
So far, China’s reaction involves more cynicism than fear. Party high-ups are connoisseurs of power and coercion. That is how they become party bosses (at least until the next purge). It is why they respect and resent America, the one country with the financial, technological and military might to slow China’s rise. By contrast, they see Europe as an economic giant with puny geopolitical leverage, hobbled by its need for consensus among 27 members.
