Trump’s Tariffs: China Acts, Europe Reacts
The EU attempts to salvage its outdated trade model with a “Trump containment strategy.” Instead, it should stick to its own future model.
Tariffs up, tariffs down. Declarations, threats, and backpedaling. U.S. President Donald Trump's global trading policy is widely recognized. The question is whether trade deals are truly his main concern. He wants other countries to buy more American products, yet sometimes he wants to help out his friends, such as Brazil's far-right ex-President Jair Bolsonaro.
China has a clear strategy. It diversified its investments, trade relations and markets like few other countries — well before Trump. It invested in its own domestic market and in emerging future technologies. Following Trump's first term — and before then-U.S. President Joe Biden raised import tariffs on Chinese electric cars to 100% in May 2024 — Chinese electric vehicle manufacturer BYD was already planning to build a massive new car plant in Hungary. It is currently under construction and is expected to be operational by the end of the year.
As is customary, China is deploying its own workforce to Hungary to construct the factory and the related infrastructure. This moves the car manufacturer even closer to the European market. European car makers worry about declining demand as they struggle to compete with the low-cost electric vehicles coming from China. At the same time, they’re facing the threat of 30% import tariffs on the U.S. market — if Trump follows through on his warning.
The EU attempts to salvage its outdated trade model with a “Trump containment strategy.” The first thing to be sacrificed were the hard-won regulations aimed at a more socially and environmentally conscious future: sustainable supply chains and the Green Deal have mostly been eliminated. Europe should stick to its own future-ready model instead.
Perhaps an exit strategy for nonessential consumer industries would be appropriate, such as combustion engine cars similar to the one (still) in place for coal. Europe should hold onto a green subsidy policy — but one that’s bound to social and environmental conditions. And it should invest more in Europe's human capital.
Tariffs up, tariffs down. Declarations, threats, and backpedaling. U.S. President Donald Trump's global trading policy is widely recognized. The question is whether trade deals are truly his main concern. He wants other countries to buy more American products, yet sometimes he wants to help out his friends, such as Brazil's far-right ex-President Jair Bolsonaro.
China has a clear strategy. It diversified its investments, trade relations and markets like few other countries — well before Trump. It invested in its own domestic market and in emerging future technologies. Following Trump's first term — and before then-U.S. President Joe Biden raised import tariffs on Chinese electric cars to 100% in May 2024 — Chinese electric vehicle manufacturer BYD was already planning to build a massive new car plant in Hungary. It is currently under construction and is expected to be operational by the end of the year.
As is customary, China is deploying its own workforce to Hungary to construct the factory and the related infrastructure. This moves the car manufacturer even closer to the European market. European car makers worry about declining demand as they struggle to compete with the low-cost electric vehicles coming from China. At the same time, they’re facing the threat of 30% import tariffs on the U.S. market — if Trump follows through on his warning.
The EU attempts to salvage its outdated trade model with a “Trump containment strategy.” The first thing to be sacrificed were the hard-won regulations aimed at a more socially and environmentally conscious future: sustainable supply chains and the Green Deal have mostly been eliminated. Europe should stick to its own future-ready model instead.
Perhaps an exit strategy for nonessential consumer industries would be appropriate, such as combustion engine cars similar to the one (still) in place for coal. Europe should hold onto a green subsidy policy — but one that’s bound to social and environmental conditions. And it should invest more in Europe's human capital.
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