On November 9, former World Trade Organization chief Pascal Lamy called on the EU and China to join forces against President-elect Donald Trump’s promised trade restrictions. Indeed, the EU and China are both key trade partners of the US, and their economic interests would be harmed by Trump’s prospective trade curbs. Nevertheless, the establishment of an EU-China “united front” is improbable due to the increasing number of discrepancies in their relationship. Brussels and Beijing are more likely to have selective economic engagement characterized by de-risking and tit-for-tat measures. Such a cooperation entails economic disadvantages and strategic benefits for both sides.

Since Trump was re-elected on November 5, leaders of the EU and China share the task of designing policies that cope with the impact of his forthcoming trade policies. If history is any guide at all, it seems that Brussels and Beijing will face restrictive trade measures imposed by Washington. The first Trump administration left the EU with additional import tariffs on aluminium (10%) and steel (25%) products and it hit Beijing with duties that impacted $350 billion worth of Chinese goods.

The upcoming second term of the Trump administration portends even more damage to EU and China trade. In his latest campaign, Trump promised 60-100% of duties on products imported from China and 10-20% of blanket tariffs on all US imports, which would impact EU products. If Trump was to make good on his promises, the EU would face $39-125 billion of export losses, while China would lose $34-125 billion of exports.

The stakes are high for Brussels and Beijing. In 2023, US two-way trade amounted to nearly $944 billion with the EU and $575 billion with China, making Washington one of the major export markets for both the Brussels and Beijing. Against the backdrop of US‑China decoupling, two-way trade between the EU and China amounted to nearly $783 billion in 2023, and they have become more reliant on each other in the import of manufactured goods, such as road vehicles, industrial machinery, clothing or handbags.

With the prospect of greater decoupling and more punitive tariffs from the US, the EU and China have an impetus to establish a “united front”, as Lamy proposed. Chinese President Xi Jinping hit a similar tone at his November 19 meeting with German Chancellor Olaf Scholz and French President Emmanuel Macron on the sidelines of the G20 Leaders’ Summit, when he stressed the need for stronger EU-China cooperation to tackle challenges such as “rising protectionism and unilateralism”.

Nevertheless, a growing number of divergences in their relationship undermine the establishment of an EU-China trade coalition.

To begin with, Brussels is concerned about the impact of Chinese economic engagement with member states on EU unity. In the past, Brussels failed to pass statements criticizing Beijing’s controversial political practices because Greece and Hungary blocked them. Stakeholders involved with those statements ascribed Greek and Hungarian behavior to their cordial relations with China. EU concerns persist on this matter, as EU Commission President Ursula von der Leyen referred to Chinese “divide and conquer” tactics in a 2023 speech that discusses economic de-risking vis‑à‑vis Beijing.

The EU’s sense of economic vulnerability vis-à-vis China also hinders cooperation between Beijing and Brussels. The EU’s aims to address these vulnerabilities by reducing reliance on external inputs in critical sectors, acting against market distortion, limiting exports and outbound investments in dual-use technologies, as well as coordinating with likeminded partners on enhancing economic security. The EU’s pursuit of these policies is going to negatively impact trade ties with China. For instance, more than 90% of the EU’s rare earth, magnesium and lithium imports come from China, and Brussels seeks to counteract Beijing’s dominance in those areas.  

Moreover, EU security concerns over China’s reported support to Russia in the Ukraine conflict also generate dissent between the two parties. Brussels has long been trying to convince Beijing to use its leverage on Moscow and facilitate a peace settlement. However, there has been little progress on that front, as the foreign affairs ministers of EU member states recently articulated grievances about China’s purported assistance to Russia in the conflict. European security grievances could negatively impact EU-China economic ties, as the EU has a track record of sanctioning Chinese companies over the Russia links.

Furthermore, the EU and China are not entirely aligned when it comes to human rights and democratic values. This divergence impacts their economic relationship. In 2021, clashing views about human rights practices in China led to EU sanctions and Chinese countersanctions, affecting individuals and entities on both sides. Subsequently, the EU Parliament froze the ratification of Comprehensive Agreement on Investment with China, a deal that would give European companies more access to the Chinese market.

Finally, China’s insecurity about US influence on the EU is another source of discord between the two parties. In the past year, the EU has investigated the market distorting effect of state subsidies provided to batter electric vehicle producers in China and decided to impose additional tariffs on the import of those products. In the Chinese reading, the EU was doing “Washington’s bidding”, and imitated US tariffs with its decision. China responded to the EU move by putting more than 30% of tariffs on the import of European brandy, showing how EU-US-China triangular dynamics negatively impact EU-China economic alignment.

Against this backdrop, the chances of an EU-China economic entente appear slim. Selective economic engagement between Brussels and Beijing is more probable. Such a selective engagement implies a decline in trade and investments in areas that the EU defines as “critical”: clean technology, quantum, biotechnology, AI, and advanced semiconductors, among others. The EU’s efforts of restricting economic interaction in these areas are likely to prompt surgical countermeasures by China, targeting key industries such as agriculture, high-end wine and petrol-powered cars.

While economic ties between Brussels and Beijing will be negatively impacted, both sides will benefit in the strategic realm. As the EU reduces critical dependencies on China, it will be able to pursue “strategic autonomy”—a foreign policy equidistant between Beijing and Washington. EU strategic autonomy, in turn, will benefit China, as it prevents Brussels and Washington from joining efforts to limit China’s rise. Although the recalibration of EU-China ties represents an opportunity for a more sustainable cooperation, the formation of a united economic front remains unlikely.