Fondation Robert Schuman: Europe in the sino-American trade war

10 September 2019

The US trade policy is destabilising the international trade system severely. The EU is fighting to maintain stability of a system under dire threat. This is an extremely difficult task but also a historic occasion to modify and adapt the international system to future challenges.

In March 2018 the US introduced a succession of protectionist measures that mainly targeted China. Currently, nearly 70%[1] of American imports from China are subject to additional duties. The average customs duty applied by the US on imports of Chinese goods is now 21.2%, whilst it was 3.1% at the end of 2017[2]. Likewise, since China retaliated with each American measure, the average tariff implemented on American imports to China was 21.8% in September 2019, whilst it was 8% at the beginning of 2018. Hence, as soon as we hear “trade war” we think of the stand-off between the US and China.

The European Union has not managed to escape this “war” completely. Firstly, because it was directly involved in one of these battles and because it could be the target of one in the future. And also, because a trade protection measure always has an indirect effect, even on products and countries which are not directly in the firing line. This is especially true in a world in which economies are linked together by extremely fragmented chains of value. Finally, because trade tension has also affected an international trade system that was already in crisis for other reasons. International trade is now subject to greater uncertainty than when the system was governed by well-defined rules that were independent, at least in the short term, from inter-State power struggles. In this new context what position might the European Union, the world’s leading trade player, adopt? [...]

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