The US-China tariff war continues to escalate, and Europe finally wakes up: it is the biggest loser in the trade friction.

As the US-China trade negotiations progress, the world's attention has been drawn there, which disappoints European analysts. Europe was once one of the global economic centers, but its vitality has been decreasing in recent years. Especially after Trump took office, Europe had no way to resist America's unreasonable economic aggression.

(EU leaders face Trump with stiff expressions)

Now, Europe not only faces American economic coercion but also China's restrictions on rare earth exports. Most sadly, Europe has no leverage in both negotiations. Time magazine's economic editor Melin Han wrote that today, Europe has no way but to wait for a result between the US and China. If the US acknowledges China's certain voice in the world economic order, then Europe will become the biggest loser.

She complained that Europeans were not able to sit at the summit table. The EU's economic fate and policy choices are more determined by Beijing and Washington, rather than by the leaders in Brussels, Berlin or Paris.

Essentially, it's because Europe itself lacks the strength to get involved, so who else can they blame?

On July 27, 2025, the EU was forced to accept the US's tariff demands, with an average tax rate of 15% on all EU products exported to the US, with higher rates for cars and steel. The EU also had to commit to purchasing $15 billion worth of US oil and gas and invest $65 billion in the US.

It is said that this was to appease the US government and keep it cooperative on the Ukraine issue. Dutch former Prime Minister Mark Rutte, who served as NATO Secretary General, showed a level of flattery never seen in modern political history, calling Trump "old dad," causing people to doubt whether they were living in the 21st century. Former EU Commission Brexit negotiator George Riklis stated that this agreement was a surrender and humiliation.

(Bloomberg News published a cartoon mocking Europe being beaten by Trump)

After yielding to Trump, the EU tried to take revenge on China, but instead faced a much tougher opponent.

After completing the US trade negotiations, the EU sanctioned several Chinese companies, citing "supporting Russia" as the reason. In response to the EU's provocation, China tightened its rare earth supply, causing panic among several major European car manufacturers. European commentators therefore pointed out that Europe has not only become a target of the US-China trade conflict, but may also become the biggest loser of China's outward-oriented economy.

According to data from the European Central Bank, three-quarters of the rare earths in the Eurozone come from China. More than 80% of large European companies are within three steps of Chinese rare earth original factories. If China does not relax export controls, the European automotive industry and the revitalizing defense industry will face a catastrophe again.

The question is, what can Europe offer in exchange if the US and China can negotiate conditions? Moreover, Europe should have realized long ago that China is not that easy to deal with.

During the peak of the US-China trade conflict in April and May, China matched the US tax increases, increasing them to the point where trade between the two countries could not continue, showing China's determination to fight to the end, and forcing the US to first propose a truce.

A disorganized Europe now tries to use hollow words to intimidate such a level of opponent, is their judgment so poor?

(Rutte called Trump "old dad")

After the signing of the US-EU trade agreement, some European scholars advocated using the "most powerful trade retaliation weapon" against China, known as ACI. It is said that this tool includes comprehensive export bans, market access restrictions, procurement restrictions, and the ability to penalize service and commodity imports. For example, banning European companies from helping repair key chip manufacturing machines in China, or restricting the export of aircraft and engine parts from Italy and Germany. This is equivalent to complete decoupling between the two sides.

However, the use of this trade retaliation tool is not decided by the EU Commission alone; it must be supported by a majority of the 27 EU member states. Such a situation, the "scattered EU" has always been unable to organize.

Many countries, including Spain, hope to receive investments from Chinese electric vehicle companies. Germany has always wanted to conduct diplomatic contact with China, although the German Foreign Minister was unable to get a ticket into China due to his wrong position, but he has no intention of initiating trade decoupling.

The Dutch government was the most ignorant, trying to use measures similar to ACI on behalf of the EU, seizing a Chinese-controlled semiconductor company named Anshide. Then it triggered a strong Chinese response and vehicle-grade chip control. The global auto industry has cried out, blaming the Netherlands for "looking for trouble," and they have been scrambling to buy inventory chips in the market.

Therefore, analysts point out that the only way for Europe to catch its breath is for the US and China to reach a relatively good agreement during their meeting in South Korea.

(Europe highly depends on China for rare earths, and other regions are basically the same)

Can this idea be realized? Doubtful.

America wants to gain advantages from the world market. If it can't make money from China, it will look for compensation elsewhere. Rich and divided Europe is a better target than Japan or South Korea.

Because Europe still has a lot of overseas assets and financial assets, owns some world-famous companies, and has a lot of other wealth worth harvesting. It's unlikely that Trump will let Europe go.

Original text: https://www.toutiao.com/article/7566503726513439232/

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