How Trump's Trade War is Accelerating EU-China Rapprochement

The Donald Trump-driven "tariff war" has already borne bitter fruit for US manufacturers and agricultural producers as China turns to European aircraft and beef.

"The Trump administration has abrogated the agreement reached during the US-China trade negotiations," Li Kai, a researcher at the Shanxi University of Finance and Economics (SXUFE) told Sputnik China. "The US believes that it is necessary to continue a trade war and thinks that it will rise victorious. In response, China has taken countermeasures affecting the supply of agricultural and aquatic products, as well as aviation."

For instance, China may shift its focus from US-made Boeing to its competitor, the French Airbus, the Chinese scholar noted. According to Li, the trade deficit between the US and China had early been reduced through the sale of American planes in China. "They were an important lever regulating the trade balance between the two countries," he opined.

However, given Trump's determination to proceed with the trade war, which is leading US-China trade and economic relations into a deadlock, China has decided to inflict pain on American producers, Li noted, including the Boeing Company.

"Aircraft exports play an important role not only in business, but also in the political life of the United States," the Chinese scholar emphasized. "The Boeing Company lobby groups have a great influence on US political circles. Boeing has a complex multi-level production chain: if it is subjected to any changes, it will affect many parties concerned. Although the Chinese and Americans did not jaw at each other, the measures taken by both sides indicate their intention to continue the trade war."

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For his part, Mikhail Belyaev, chief economist at the Institute of Stock Market and Management (ISMM), highlighted that Trump's tariff spats with Brussels and Beijing are accelerating China-EU rapprochement.

"The split between Europe and the US is taking clear shape," the economist pointed out. "The Chinese and Southeast Asia vector is becoming more appealing to Europe. China and Asia in general are emerging as one of the centers of global development. Europe is now between two opposite poles: The US is pushing it toward China; China, for its part, is pulling [Europe] in. Therefore, Europe's movement towards China will accelerate, despite political tensions and disagreements in the trade and investment sphere."

​On June 25, China and the EU held the seventh annual High-level Economic and Trade Dialogue (HED). The summit was led by European Commission Vice President Jyrki Katainen and Vice Premier of the State Council Liu He. Both sides emphasized the necessity to maintain a "rules-based multilateral trading system with the World Trade Organization (WTO) at its center."

​The EU and China vowed to exchange market access offers in the framework of the EU-China Comprehensive Agreement on Investment kicked off in 2013. In particular, the sides discussed the expansion of access for EU beef and poultry to Chinese market.

​Besides, Vice President Katainen called upon China to tackle overcapacity in steel and aluminum production and urged to prevent overcapacity in high-tech sphere within the framework of the Made in China 2025 program.

Meanwhile, China reportedly expressed willingness to buy more France's farm products and Airbus jetliners.

"I explained to Mr. Prime Minister that in recent years we have bought quite a lot of passenger aircraft, and there needs to be a period to digest this. In spite of this, we are still willing to strengthen cooperation with France's Airbus," Chinese Premier Li Keqiang told a joint press conference with French Prime Minister Edouard Philippe, as quoted by Reuters.

Li pointed out that there will be no winners in a trade war, referring to the Trump administration's tariff spree.

In March 2018 US President Donald Trump announced the imposition of additional tariffs on steel and aluminum, prompting a storm of criticism from Washington's allies and trade partners. The measure came into force on June 1, 2018. Simultaneously, the White House put additional duties on $50 billion worth of Chinese products on June 15. Beijing immediately adopted tit-for-tat measures, prompting criticism and new threats from Washington. The EU followed suit on June 22 and placed tariffs on 2.8 billion euro ($3.2 billion) worth of US goods, pledging to subject more American products to high duties "at a later stage."

The views and opinions expressed by the contributors do not necessarily reflect those of Sputnik.