“There is no winner in a tariff war,” Chinese President Xi Jinping told Spanish Prime Minister Pedro Sánchez, just as Beijing announced additional tariffs on products imported from the United States.
From the Chinese capital, Xi extended an invitation of collaboration to the European Union, declaring that both sides must join forces to defend globalisation and oppose what he called “unilateral acts of bullying”.
Recognising the economic strength of China and the EU, Xi said the two sides have come to create a close relationship of “economic symbiosis”, as supporters of economic globalisation and free trade.
Spanish Prime Minister Sánchez depicted China as an important partner of the EU, stressing that his country had always favoured a stable development of EU-China relations.
Signs of a China-EU detente?
This marked the first time the Chinese president has publicly addressed the announcement of tariffs by United States President Donald Trump, which are meant to “rebuild” the economy and “restore” national and economic security.
Although the tariffs have since been put on hold for 90 days, China was exempt from the alleviation. This prompted Beijing to retaliate by raising import taxes on US goods to 125 per cent, while describing Trump’s practices as “wrong and unilateral”.
“The two sides should promote the building of a fair and reasonable global governance system,” Xi told Sánchez at the Diaoyutai State Guest House in Beijing. But while the invitation extended to the EU is loud and clear, there is no sign of talks with the US.
Sánchez however, said there is a need for China and the US to hold talks and ease the situation, as Spain seems to be positioning itself as a possible mediator between China and the EU in hopes of drawing more Chinese investment.
Spain’s campaign appears to have produced a clear benefit, as Sánchez and Xi reached a new trade agreement allowing Spain to export more pork by-products and cherries to China, following recent positive developments with electric vehicles tariffs.
Prior to this, the EU had issued “calls of help” to China, firstly through a phone call of European Commission President Ursula von der Leyen with China’s Premier Li Qiang, followed by a video call between China’s Commerce Minister Wang Wentao and European Commissioner for Trade and Economic Security Maroš Šefčovič.
Future trade relations
China was the third largest partner for EU exports of goods and the largest partner for EU imports of goods in 2024, with the Netherlands as the largest importer of goods from China and Germany as the largest exporter.
Compared with 2023, there was a slight decrease in imports and exports, by 0.5 per cent and 4.5 per cent respectively. However, in the decade spanning from 2014 to 2024, imports from China increased by 101.9 per cent, while exports grew by 47 per cent.
But despite public advocacy for cooperation and multilateralism, EU-China relations seem to be at a pivotal moment, with underlying mistrust, diverging strategic interests, and deep-seated unresolved tensions.
John Clarke, senior EU trade negotiator, recently commented that China is attempting to strengthen economic links with Europe not out of ideological alignment, but out of necessity.
He remarked that Beijing cannot afford a trade war on two fronts and is now seeking to woo Europe while exploiting political divisions within the bloc, particularly through relationships with Hungary and other more China-friendly governments.
Better to be feared or respected?
Clarke implied that China is playing a longer game, with President Xi drawing from Deng Xiaoping’s doctrine of “bide your time, hide your capacities”. Although China’s capacities are no longer hidden, its leaders still seem willing to wait patiently for global power to tilt in their favour.
Clarke struck a reflective note, posing a critical question for Chinese leadership: will they choose to assert their growing power through force and coercion, or will they instead embrace a model of peaceful coexistence, multilateralism, and global responsibility?
Pursuing the former path could create a legacy of mistrust that will be hard to overcome, undermining China’s strategic ambitions. For the first time in centuries, China has the economic and political confidence to shape the international system.
Whether it chooses to be feared or admired remains to be seen.
[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]