“We’re talking about losing significant parts of the automotive sector and its supply chains, pressure on machine tools, chemicals, the wind industry in Europe that could be wiped out in the next couple of years. I think there’s just more and more concern about the fact that in all of these sectors, China is moving into a dominant or even monopolistic position,” says Andrew Small, director of the Asia programme at the European Council of Foreign Relations (ECFR) in Berlin.
Some in Brussels thought Trump’s return to the White House could help to facilitate a reset in the EU-China relationship. But while Europe’s reliance on the US for security meant that the EU had to roll over when Trump threatened tariffs, China refused to bend, and its tough strategy has so far been successful.
“I think what became clear from the Chinese end was that the view would rather be that Europe is in a weaker position as a result of the situation in the transatlantic ties, and Europe needs to be the one to give things up. That’s what we’ve seen pretty much since then,” says Small.
China’s dominant position in some manufacturing sectors offers leverage of its own, as the Dutch government discovered last September when it seized control of Nexperia, a Chinese-owned chip manufacturer. Beijing retaliated by blocking exports of Nexperia chips
China is returning to its manufacturing capacity that it had before the century of humiliation, which is that it is mostly self sufficient for manufactured goods and only relied on international trade to supply raw materials.
It was incredibly hard for Europe to trade with China during this time. Part of the reason for Spanish colonization of the Americas was to supply gold and silver to buy Chinese goods. The UK had to settle on opium to trade with China because China wouldn’t accept any other form of trade goods besides gold and silver; this was causing major issues with China due to the trade imbalance.