Xi Jinping Could Woo Europe With A Potential China Deal To Undercut Trump's Tariff Strategy, Expert Warns

As President Donald Trump seeks to strike a tariff deal with the European Union (EU), there are growing concerns that China might exploit the strained U.S.-EU relations to its advantage.

What Happened: Xi Jinping could propose an enticing deal to Europe, despite the risks associated with Chinese economic engagement. Elaine Dezenski, senior director at the Foundation for Defense of Democracies, told Fox Business that China might agree to increase EU imports, making its 1.4 billion consumers a more attractive market for European leaders than the U.S.’s smaller, albeit wealthier, consumer base.

“However, given China's economic pressures, it may be willing to offer a deal that Europe finds too hard to turn down,” cautioned Dezenski.

Chinese exports to the U.S. rose over 12% in March year-on-year, but are expected to drop as the trade war escalates, potentially leading Beijing to shift exports to Europe.

However, the EU remains wary of China’s dumping practices in the European market. During a conversation with Chinese Premier Li Qiang last week, European Commission President Ursula von der Leyen voiced concerns about China’s involvement in the U.S.-China tariff dispute and the risk of trade diversion, as per Fox Business.

Why It Matters: This development comes at a time when the EU and China are exploring the possibility of setting minimum prices for Chinese-made electric vehicles, as an alternative to tariffs imposed last year.

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Furthermore, the EU has threatened to impose levies on U.S. tech giants like Meta Platforms META and Google GOOG GOOGL if the ongoing tariff negotiations with the Trump administration fail.

Amid these trade tensions, the European Central Bank (ECB) has even cut its benchmark deposit rate by 25 basis points, marking the seventh cut since June 2024. This decision was taken in response to the dynamics of underlying inflation and the strength of monetary policy transmission.

Steve Yates, senior research fellow for China and National Security Policy at The Heritage Foundation, doesn’t believe that the EU and China’s trade relations could improve amid dumping concerns. He also stated, “EU and China cannot offset the U.S. market by expanding exchange between each other. Not by a long shot.”

Meanwhile, China has vowed to retaliate against nations siding with the Trump administration's “Unilateral Bullying,” and declared that it will “Never Accept It.”