An opinion article by Alicia Garcia-Herrero concludes that a Trump-Xi detente with managed trade risks Europe getting shut out of international markets. Because China and the US have agreed to a board of trade and investment, the author believes this further isolates Europe on both the trade and investment fronts by virtue of being a bilateral agreement rather than a multilateral one.
If China, for example, commits to buying American commodities (like soybeans and other agriculture) and opening its markets to American products (such as aircraft), it risks further shutting Europe out of the Chinese market. Germany, in particular, is already under brutal pressure. Additionally, there is common interest between America and China to let China export clean energy in form of solar and batteries, given the energy demand from the AI boom. If the US allows this, it further reduces Europe’s goods exports to America, which has already been hit by tariffs.
The investment side to the summit could also mean that American financial institutions will have preferential access to the Chinese market, effectively shutting out European financial institutions from an already restrictive investing environment.
There are also worries that Europe is being shut out from talks on Iran and Taiwan. In particular, Europe is dependent on the export of chips from TSMC which underpins their industries. The US has successfully pressured TSMC to move some of their chip manufacturing, even if only a small amount, out of Taiwan and into the US, but Europe does not have the same hedge in the event that this flow of chips is cut off. As such, small changes in the status quo can be very consequential for Europe.*
*I think this last point by the author is largely overblown with regards to Taiwan, it overexaggerates the chip manufacturing present in the US and all signs point to a stable status quo, even if it did regress to a point from before Biden’s presidency.
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An opinion article by Alicia Garcia-Herrero concludes that a Trump-Xi detente with managed trade risks Europe getting shut out of international markets. Because China and the US have agreed to a board of trade and investment, the author believes this further isolates Europe on both the trade and investment fronts by virtue of being a bilateral agreement rather than a multilateral one.
If China, for example, commits to buying American commodities (like soybeans and other agriculture) and opening its markets to American products (such as aircraft), it risks further shutting Europe out of the Chinese market. Germany, in particular, is already under brutal pressure. Additionally, there is common interest between America and China to let China export clean energy in form of solar and batteries, given the energy demand from the AI boom. If the US allows this, it further reduces Europe’s goods exports to America, which has already been hit by tariffs.
The investment side to the summit could also mean that American financial institutions will have preferential access to the Chinese market, effectively shutting out European financial institutions from an already restrictive investing environment.
There are also worries that Europe is being shut out from talks on Iran and Taiwan. In particular, Europe is dependent on the export of chips from TSMC which underpins their industries. The US has successfully pressured TSMC to move some of their chip manufacturing, even if only a small amount, out of Taiwan and into the US, but Europe does not have the same hedge in the event that this flow of chips is cut off. As such, small changes in the status quo can be very consequential for Europe.*
*I think this last point by the author is largely overblown with regards to Taiwan, it overexaggerates the chip manufacturing present in the US and all signs point to a stable status quo, even if it did regress to a point from before Biden’s presidency.