Source: Global Times

[Special correspondent of the Global Times, Wang Yi; correspondent of the Global Times in Russia, Su Xin] "Due to concerns that transatlantic relations have suffered irreversible damage, the EU is racing to reach trade agreements with various countries around the world to reduce dependence on the US," Bloomberg reported on the 11th. EU chief negotiator and Commissioner for Trade and Economic Security, Šefčovič, is expected to travel to Washington on the 14th local time to persuade US President Trump to lower tariffs already imposed on EU exports worth 38 billion euros. Sources revealed that while negotiating, the EU is accelerating efforts to reach free trade agreements in other regions, as EU officials believe that the relationship between the EU and the US will never return to the past. EU Commission President von der Leyen stated on the 10th that the EU will further turn to Asia.

EU Commission President von der Leyen Image source: Visual China

Potential escalation of transatlantic trade war

According to a report by The New York Times on the 11th, an EU Commission spokesperson stated on the 10th that the goal of this visit to the United States is to strive for a "win-win" outcome. The EU has put forward some incentives, such as reducing tariffs on imports of American cars and other industrial products, as well as increasing purchases of US liquefied natural gas. The EU also threatened that if negotiations fail, Europe will take retaliatory measures.

Not long ago, Trump announced a 20% "reciprocal" tariff on almost all EU exports, then postponed this measure for 90 days, maintaining the new tax rate of 10%. The US has also imposed a 25% tariff on EU steel and aluminum exports, and a 25% tariff on EU cars and some car parts. Trump also mentioned that he would announce additional tariffs on wood, semiconductor chips, and medicines.

Recently,在接受英国《金融时报》采访时，冯德莱恩 said that if no solution is reached in negotiations with the US government regarding tariffs, she is prepared to expand the transatlantic trade war into the service sector, possibly taxing digital advertising revenue, which will directly impact major US tech giants like Google and Facebook.

Fon der Leyen said that the EU hopes to reach an agreement acceptable to both sides regarding tariffs with the US. Otherwise, if China and the EU find common ground in keeping global markets open, Europe can focus on reducing dependence on the US under Trump's leadership.

The EU's goal is to "protect the remaining 87%."

The Japan Times reported on the 12th that the EU is embarking on a charm offensive to diversify its allies in Asia and other regions, holding continuous summits and engaging in trade negotiations in various directions.

Since January, the EU's trade negotiation agenda has been packed. Just before Trump was sworn in, the EU expressed its intention to strengthen trade relations with Mexico and resumed trade talks with Malaysia on the day of his inauguration. Subsequently, in February and March, high-ranking EU officials met with leaders of India and South Africa to discuss trade issues and actively sought closer ties with Canada.

Data compiled by the EU shows that it has the largest network of trade agreements in the world, covering about 75 partners with a trade volume exceeding 2 trillion euros. Among them, transatlantic trade in goods and services amounts to 1.6 trillion euros. The New York Times reported that Šefčovič recently stated bluntly that the US accounts for 13% of global merchandise trade, and the EU's goal is to "protect the remaining 87% and ensure that the global trading system benefits our other countries." Von der Leyen stated on the 10th that "Europe continues to be committed to diversifying its trade partnerships and engaging with countries accounting for 87% of global trade, working together to promote free and open exchanges of goods, services, and ideas."

Bloomberg reported that von der Leyen mentioned on the 10th that the EU will further turn to Asia and explore strengthening cooperation with members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This agreement covers a trading zone from Australia to Canada. New Zealand Prime Minister Ardern proposed using this agreement as a basis to reach broader agreements with the EU to build a rule-based trade group.

"Trump's tariffs bring the EU and China closer together."

The tariff war is also bringing EU-China trade relations closer. Reuters reported on the 11th that since returning to the White House, a number of European officials and lawmakers have traveled to Beijing. Both sides have quietly strengthened coordination.

On the 8th, Commerce Minister Wang Wentao held a video conference with EU Commissioner for Trade and Economic Security Šefčovič. Both parties agreed to start consultations as soon as possible to thoroughly discuss market access issues and create a more favorable business environment for enterprises. They also immediately initiated negotiations on price commitments for electric vehicles and discussed EU-China automotive industry investment cooperation. Belgian news agency Belga reported that a spokesperson for European Council President Costa confirmed on the 11th that the timing for the next China-EU summit is being coordinated and is expected to be held in July.

"Trump's tariffs bring the EU and China closer together." Singapore's Thinking China magazine reported on the 11th that Europe and China are both powerful economies, and their renewed engagement may attract other participants to join a "willing alliance" to keep global demand strong and prevent devastating economic recessions. Undoubtedly, ASEAN and the English-speaking world (the UK, Canada, Australia, and New Zealand) as well as India, Japan, and South Korea will also benefit from this.

Russia's Izvestia cited Kirill Seleznev, a stock market expert at Garda Capital, who said that the combined GDP of China and the EU accounts for a significant portion of the global economy and will continue to grow in the coming years.

However, Agence France-Presse cited experts as saying that the EU's efforts to diversify may encounter obstacles, including the fact that the US possesses unparalleled market power and demand globally, making it difficult to replace in the short term. Wager Folkman, a researcher at the European Policy Center, said that re-planning trade routes and volumes requires time and cannot happen overnight.

The New York Times believes that this "turn" is unlikely to be painless, but as Ms. von der Leyen and her colleagues often point out, "the size of the US consumer market is large, but not omnipotent." The report stated that Europe's basic strategy is clear: it is pushing for an agreement with the US, but it also recognizes that the world is at a turning point and wants to take advantage of this situation to succeed. "Not changing is not an option."

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