Stephen Olson

Opinion | China-EU investment deal shows a Joe Biden united front on trade will not be easy

The EU’s decision to proceed with the deal and ignore Biden’s requests to slow down shows the extent to which US and EU China strategies are not always in sync

Some type of US-EU coalition on China is likely to materialise, but it will be more limited in scope and more complicated to manage than originally thought

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US and EU flags are on display in the EU headquarters in 2017. While there is broad alignment between the US and the EU on China trade issues, there are differences which could complicate the establishment of an effective coalition. Photo: AFP

Stephen Olson

Published: 4:00am, 19 Jan 2021Updated: 6:06am, 19 Jan 2021

As President-elect Joe Biden’s administration gets up and running, perhaps the sharpest policy difference with its predecessor will be the new president’s desire to repair global alliances, build coalitions and work constructively with like-minded countries. This is particularly true on trade policy, where Biden has expressed a desire to establish a united front with the European Union on trade grievances with China.

Biden’s desire to reverse President Donald Trump’s go-it-alone strategy is prudent. However, caution is in order. While there is broad alignment between the United States and the EU on China trade issues, there are differences which could complicate the establishment of an effective coalition.

These are already evident. The EU’s decision to move forward with an investment agreement with China, ignoring requests by the Biden team to slow down, demonstrates the extent to which US and EU China strategies are not always in sync.

Although it has been overshadowed by the US-China trade war, the US-EU trade relationship is also on rocky ground. The EU was broadsided by the Trump administration’s imposing steel and aluminium tariffs on national security grounds, and it responded with US$3 billion in retaliatory tariffs.

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