Asian Angle | As US and EU square up on trade, one country stands to benefit: China
Squabbling between the former allies is likely to work in the ultimate interests of only one country: China
The European Union and the United States should, in terms of trade flows, have common cause when it comes to China. Both suffer the same plight: enormous trade deficits.
In 2017, the pattern of the previous decade since China joined the World Trade Association in 2001 was repeated. Of their total trade with China – US$578 billion for the US and US$431 billion for the EU in 2016 – only a third was from exports while two-thirds were from imports, leaning in China’s favour.
This concern about China’s mercantilist behaviour is something the EU and US have raised at their separate high-level bilateral dialogues with Beijing many times. They have aimed to have greater market access, to get fairer treatment for their exporters, and, over the years, have used trade weapons like tariffs and anti-dumping measures.
Donald Trump proves trade wars with China are good and easy to win
Going back to 2005, the EU had its famous “bra wars” dispute with Beijing, arguing about the textile trade. An even larger spat occurred in 2013 over solar panels, in which each side threatened the other until they negotiated a deal over imports of equipment that was seen as threatening businesses in Europe because of generous state subsidies allowed to Chinese competitors.
Even in late 2016, this action towards a key ally and trade partner would have been seen as unthinkable. In the world of Trump, however, we must all start using our counter-intuition – nothing goes quite as expected.
ZTE mess shows need to change the ‘Chinese way of doing business’
