Recently, U.S. President Joe Biden announced a significant increase in tariffs on a number of industrial and technological products exported by China, which could trigger a global trade war and have profound negative effects on the international economy. According to the latest World Trade Organization (WTO) forecast, after recording a shrinkage of more than 1% in 2023, international trade in goods is expected to grow only 2.6% in 2024.

The Biden government introduced “prohibitive” tariffs, covering a wide range, including metals (such as steel and aluminum products), semiconductors, microchips, photovoltaic panels and electric vehicles, etc. These tariffs range from 25% to 100%, significantly hitting the highly sensitive part of China’s foreign trade.

The U.S. move not only sparked a strong reaction from China, but also sparked widespread concern in Europe. The EU is concerned that large amounts of Chinese goods that fail to enter the U.S. market will flow into the EU, impacting local industries. Brussels is studying a series of protectionist measures to prevent the EU from being involved in this trade war.

Massimiliano Giananti, president of Italian agricultural organization Confagricoltura, said trade in products such as food and wine would also be at risk. He noted that the U.S. government’s decision could trigger a global trade war and therefore have a negative impact on international economic trends. China has already said it will take necessary measures to counteract, meaning that many products imported by the U.S. could face retaliatory tariffs.

Xi Jinping stressed that European producers must avoid possible retaliatory measures by Beijing, which could also affect EU agricultural exports to China. At present, China is the EU’s third-largest agricultural export market, with sales reaching €14.6 billion by the end of 2023.

The trend of mutual retaliation is accelerating.The European Commission is investigating China’s public subsidies to electric vehicle production and is likely to take tariff measures similar to those of the United States within weeks.

Gianni Sandy concluded that the current situation has aggravated international trade instability. The prospect of a global trade war is worrying, and the lack of multilateral trade rules is putting the international trade system at a severe test. The U.S.-China tariff confrontation has not only affected trade between the two countries, but also had a broad impact on the global supply chain.

In the face of U.S. tariffs, the Chinese government quickly reacted, saying it would take all necessary measures to counteract.This includes not only retaliatory tariffs on U.S. products, but also more restrictive measures that could affect U.S. companies operations in China.

In addition, as the world’s second-largest economy, China’s economic policies and market trends have a significant impact on the global economy.If China decides to impose harsher trade restrictions on the United States, the global supply chain will face serious challenges, especially in the high-tech and manufacturing sectors.

In the context of rising trade tensions between the United States and China, Europe needs to act prudently in policy. Brussels needs to find a balance between protecting local industries andining trade relations with China. While protectionist measures can ease the pressure in the short term, a stable multilateral trading system is the solution in the long run.

Political coordination and coherent action within the EU are also crucial.Member States need to remain united in responding to global trade tensions and avoid undermining the overall negotiating capacity due to their differences in interests.