The New Tariff War: United States, China, and the Consequences for Europe

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The United States’ announcement of a significant increase in tariffs on the import of electric vehicles, batteries, steel, aluminum, and semiconductors from China has reignited trade tensions between the world’s two largest economic powers. The measure, which includes tariffs of up to 100% on certain strategic goods, has been justified by the US administration as a response to China’s unfair practices in terms of subsidies and industrial dumping. Beijing reacted firmly, announcing retaliatory measures, while the World Trade Organization (WTO) watches with growing concern over a potential escalation.

The Legal and Trade Context

The United States has invoked Section 301 of the Trade Act of 1974 to justify the reintroduction of punitive tariffs—a tool already used during the Trump administration, which “…authorizes the President to take all appropriate action, including tariff-based and non-tariff-based retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts U.S. commerce”.

There is a real risk that this unilateral approach could violate the rules of the multilateral trading system, especially if China formally files a complaint with the WTO.

For its part, the European Union finds itself in a particularly delicate position. Europe heavily relies on exports and the stability of global supply chains, and a resurgence of protectionism could severely impact key sectors of the continental economy, such as automotive, electronics, and machinery manufacturing.

Europe’s Challenges and Dilemmas

Europe is faced with the need to manage a highly complex balance: on one hand, it must preserve strategic relations with the United States, a key partner in terms of defense, technology, and trade cooperation; on the other, it cannot afford to damage ties with China, which remains a vital market for many European industries, as well as a key supplier of critical materials and components.

In this context, the European Commission has launched several anti-subsidy investigations into Chinese electric vehicles and is monitoring Beijing’s aggressive trade practices. However, the bloc of 27 member states remains divided on the approach to take: some countries, such as Germany, advocate caution, fearing retaliation against their industrial sectors most exposed to the Chinese market. Others, like France, are pushing for a tougher and more protectionist stance.

Outlook and Future Implications

For Europe, the real challenge lies in strengthening its strategic autonomy and industrial resilience without abandoning the principles of free trade. The risk is to become “collateral damage” in a trade war fought by others. European institutions must act with clarity, leveraging regulatory tools on zero-emission industry, trade defense instruments provided by anti-dumping policies, and new rules on foreign subsidies to ensure fair competition.

On the diplomatic front, it will be essential to strengthen dialogue channels with both Washington and Beijing, promoting multilateral solutions within the WTO and supporting reform of the global trade governance system.

The European Union stands at a crossroads: adapt to a world increasingly fragmented by economic blocs and confrontation, or become a driving force for a new era of cooperation and rebalancing in international trade. In a context marked by tariffs, reciprocal sanctions, and geopolitical tensions, Europe’s strategic neutrality will become increasingly difficult to maintain. Political vision, internal coordination, and a robust industrial agenda will be needed to prevent the Old Continent from being sidelined in the new global economic order.