Over the past year, officials within the European Union have been trying to entice US President Donald Trump into working together on a China strategy. Their primary goal has been to ensure continued US support for Ukraine. However, their efforts seemed to be fruitless until recently. Trump has finally shown an interest, but there’s a caveat: he’s demanding maximum tariffs.
Last Wednesday, representatives of the 27 EU member states received an update by the union’s envoy for sanctions, David O’Sullivan, regarding his latest trip to Washington D.C. According to our diplomatic insider sources, this seasoned diplomat acknowledged Trump’s proposal: he called for the EU to impose a significant 100% tariff on both China and India to curb their acquisition of Russian energy.
Trump proposed that the US would echo this step simultaneously, but only if Europe initiated it. These talks were initiated in light of early-stage discussions about imposing secondary sanctions on enterprises from China and other third-world nations that purchase Russian oil and gas, as reported initially by Financial Times.
The EU’s officials expressed initial relief that Trump is now more receptive to penalizing Russian President Vladimir Putin for his unremitting attacks on Ukraine. Nevertheless, skepticism swiftly surfaced about whether the EU possessed the ability to execute this. After spending numerous months in pursuit of involving Washington in the China issue, Brussels now finds itself in a quandary.
American trade policy has increasingly drifted apart from global trade rules, whereas EU-imposed tariffs are usually meticulously calculated. Brussels always ensures their trade bureaucrats demonstrate their methodology. Contrasting US’s decision to impose a 100% import duty on China-manufactured electric vehicles in May 2024, Canada promptly followed suit. However, the EU undertook a laborious anti-subsidy enquiry, eventually deciding on a convoluted tariff structure varying from 7.8% to 34.5% six months later.
Agathe Demarais, a known expert in geoeconomics at the European Council on Foreign Relations, expressed her opinion on the situation. She stated that this demand seemed to be an unattainable one, assuming that the partner, the EU, would reject it. This reflects the Trump administration’s reluctance to proceed with Russian sanctions because it recognizes that the EU will not agree to implement such substantial tariffs, according to Demarais.
However, as the Ukraine conflict continues to drag on and Europe appears likely to bear the majority of the future financial burden, the EU has attempted to innovate with its sanction packages. Previously, it placed sanctions on two Chinese banks over crypto transactions tied to the Russian military.
Ursula von der Leyen, European Commission President, delivered the annual State of the EU address on Wednesday, stating the possibility of further sanctions on third countries. Her words fuelled speculation that secondary actions might soon materialise. However, Maria Shagina, a sanctions expert at the International Institute for Strategic Studies, expressed her doubt. She claimed there are no legal grounds, power, or political will within the EU to move in that direction, claiming it goes against the overall concept.
Despite its declarations, the EU has been trending towards this direction, even if this necessitates a European nexus before making a move. The situation is further complicated by the fact that EU member states such as Hungary and Slovakia continue to import Russian energy. This creates an awkward predicament for Brussels when it tries to penalise Beijing or Delhi for doing the same.
The close relationship between the populist leaders of Hungary and Slovakia with Trump compared to the European mainstream, kindles hope that the US president might persuade them into action. During her address on Wednesday, von der Leyen promised to eliminate ‘dirty’ Russian fossil fuels and raise expenses for Moscow by escalating sanctions against Russia and its backers, expressing Europe’s readiness to act in partnership with international allies to pressurize Russia to halt the conflict.
Surprisingly, even though experts argue that the July tariff agreement distorts global trade norms, Brussels displayed its readiness to push boundaries to ensure that the US remains involved in Ukraine. The subsequent course of action may entail severing funding routes to Russia. This action, however, could lead to a tense relationship with China, indicates Janka Oertel, an Asia expert at the ECFR.
She suggests that it would be a prudent course of action for Europe to ponder upon what implications that may have in store. All in all, it appears that EU’s efforts at getting US onboard regarding a China policy and continued commitment to Ukraine has put itself in a delicate position.
The complexities of global geopolitics, varying trade policies, and internal EU politics have created a challenging scenario. As a critical player in maintaining the balance of power, the EU’s next moves will be closely watched by the international community, as it navigates its way in these intricate and highly nuanced situations.
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