Trade
The EU has grown to become the world’s biggest trading bloc in an era of globalisation that suited its rules-based policymaking. The EU is the world’s biggest exporter of manufactured goods and services, and it is the biggest import market for over 100 countries. The EU already has the world’s largest network of trade agreements, with 74 countries. Trade is a highly politicised issue, but surprisingly has been a relatively small area of business for consultancies and law firms however that is changing as Trump has hit the EU with a volley of tariffs since his inauguration.
As reported in The Financial Times in April: “European Commission president Ursula von der Leyen, whose body runs trade policy, has to corral 27 nervous member states behind a joint position while running talks with the US and avoiding a fresh recession for an already struggling economy. She has favoured a threefold strategy from the start. First, negotiate with Trump and retaliate when that does not work. Second, deepen trade ties with other countries to provide alternative markets for EU exporters. Third, cut barriers in the internal market.”
Thanks to the Commission’s powerful competencies in EU trade law, businesses are sometimes involved in trade defence measures, primarily anti-dumping and anti-subsidy actions against imports from countries outside the EU. China is often at the centre of these disputes, and this poses a challenge for multinational companies who often do not support legitimate trade complaints against China because of its market potential, and for fear of retaliation and the potential interruption of supply chains. The EU has recently imposed tariffs on Chinese electric vehicles (EVs) due to concerns over state subsidies, leading to tensions and retaliatory threats from China. These measures reflect the EU’s efforts to protect its industries while addressing unfair trade practices .
The EU is pursuing a “de-risking” approach rather than full decoupling from China. This strategy involves reducing dependencies on critical sectors, enhancing supply chain resilience, and diversifying trade partnerships, while maintaining open channels for dialogue and cooperation.
In response to U.S. tariffs and trade restrictions, China has initiated a diplomatic campaign to bolster international alliances, including with the EU. Efforts include lifting sanctions on certain EU parliamentarians and proposing high-level meetings to discuss trade, green development, and digitalization.