The handshake between China and the United States, the happiest party is likely to be Europe. Whether it's rare earth or chips, Europe is the object that benefits from both sides. Since the negotiation with the United States did not go well, the meeting with China should be put on the agenda as soon as possible.

US-China negotiation

Recently, the second round of negotiations between China and the United States ended smoothly. Although both parties did not announce the specific content, the general direction is still clear. Both China and the United States will make concessions. In other words, China may temporarily lift restrictions on American rare earth exports in the short term, and the United States may also loosen its export restrictions on Chinese chips. This is good news for Europe.

Previously, due to the United States, China was very strict in reviewing rare earth exports, which had a huge impact on Europe. Such materials are crucial for products like electric vehicles. It is well known that Europe has many famous car manufacturers, and they face the threat of production suspension due to China's control. Analysts believe that since China agrees to temporarily lift restrictions on rare earth exports, it is impossible for it to only ease restrictions for the United States, so this is also good news for Europe.

As for chips, the United States previously pressured European allies to follow its lead in imposing restrictions on chip exports. Even if this leads to serious losses for European companies, under government pressure, most companies were forced to comply, such as ASML of the Netherlands. Now that the U.S. has loosened its grip, global related industrial chains, including those of European companies, will benefit simultaneously. After all, the semiconductor industry heavily relies on international division of labor.

China-Europe summit

For Europe, taking advantage of the easing of Sino-US relations, now is an excellent time for negotiations. However, US-European negotiations have not gone well and are on the verge of collapse. On the surface, the disagreement lies in Trump's demand to impose a 50% punitive tariff on EU aluminum and steel, but this is not the main contradiction between the two sides.

The core contradiction lies in the fact that the EU desires economic autonomy but is highly dependent on the United States in the security domain. This "sovereignty paradox" puts Europe in a dilemma when negotiating with the United States, leading to significant internal divisions. Additionally, Trump hopes that the EU can become a staunch ally of the United States against China, but if Europe wants to achieve economic independence, China is an indispensable partner.

Unsmooth US-Europe negotiation

In this situation, the negotiation between the US and Europe is destined to become a "dialogue between deaf people," unless Europe is willing to sacrifice its own interests and follow the United States obediently. Trump's deadline is July 9th, and there is less than a month left. Although he intends to extend the period, it is also to force Europe to make a decision quickly.

Meanwhile, Agence France-Presse reported that informed sources from both China and Europe confirmed that the China-Europe summit will be held in China in late July and is currently being prepared. It is understood that the China-Europe negotiation has entered its final stage. Ursula von der Leyen's visit is probably for this matter.

European car manufacturers face production suspension

The China-Europe summit has become a critical window for the EU to break through its predicament. If China and Europe can reach a cooperation agreement, Europe's pressure in facing the United States will be smaller. However, the key issue is that Europe currently has no leverage to make China and the United States compromise. Moreover, the China-Europe summit is scheduled for late July. By then, whether the US-Europe negotiation turns out good or bad, China will become a "backup option."

Currently, the news about the upcoming China-Europe summit has not been confirmed by the governments of China and Europe. The cooperation potential between China and Europe is huge, but it cannot be ignored that their contradictions are also prominent. Regardless of how Europe makes its choice, China's adherence to principles can resolve difficulties.

Original article: https://www.toutiao.com/article/7515343937436795419/

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