French media: Why does Europe have weak influence when negotiating with China and the United States

According to an opinion column in the electronic edition of the French weekly "Le Point" on Saturday (July 19), despite its large population and strong GDP, the EU is dependent on the two major powers, China and the United States, and has to comply with their demands.

According to an article published in the economic section of "Le Point" by columnist Patrick Artus, Europe has very limited influence in negotiations with China and the United States. However, the EU should be able to stand on equal footing with these two superpowers. Europe has 450 million people, far more than the 340 million people in the United States.

In 2024, the EU's imports reached 2.64 trillion euros, while the US had 3.3 trillion dollars, and China had 2.59 trillion dollars. The EU's GDP was 20 trillion dollars, while the US had 26.9 trillion dollars, and China had 18.7 trillion dollars.

So why is the EU's negotiation power weak?

The article pointed out that China accounts for 8% of European exports (excluding intra-EU trade), and European companies have considerable turnover in China - in the automotive, equipment, chemical, retail, and luxury sectors.

Europe also relies on Chinese products such as: rare earths (90% of global rare earth refining is done in China), batteries (73% of global batteries are produced in China), solar panels (China accounts for 78% of the global market share), and active pharmaceutical ingredients (40% of the global market share is in China).

Petroleum, refined products and natural gas

The article continued that the US is the largest trading partner of Europe. In 2024, the EU's exports to the US amounted to 532 billion euros, mainly cars, industrial equipment, and medical products, accounting for 20% of the EU's total exports.

Additionally, Europe cannot do without some American goods and services: petroleum, refined products and natural gas, digital services (telecom, computer, information) and intellectual property royalties. In 2024, the EU imported 482 billion euros of services from the US, resulting in a service trade deficit of 148 billion euros between the EU and the US.

Therefore, when the US asked the EU to abandon the OECD's recommendation of a 15% minimum tax on American companies or to give up specific taxes in the digital sector, Europe had to make concessions.

The article concluded that the weakness of Europe's key mineral production, the lack of oil and natural gas resources on the European continent, the underdevelopment of the technology sector, and the EU's reliance on information and communication technologies all explain the reason for its weak negotiation power.

** Patrick Artus is an economic advisor at Ossiam and a member of the Economists' Circle.

Original: https://www.toutiao.com/article/1838097440756747/

Statement: This article represents the views of the author.