Experts believe that Washington might be aiming for its deal with Brussels to provide the United States greater influence over China.A trade agreement framework was reached between the United States and the European Union just before a fresh round of negotiations between Beijing and Washington commenced, with experts noting that China could remain composed and observe how the deal unfolds, despite the possibility of the US leveraging it as a negotiation tool.
However, Beijing should remain cautious about the possible collaboration between its two primary trade partners in the economic domain, as the US and EU might turn common grievances into a unified stance against China, they noted.
On Monday, China and the United States initiated their third round of trade discussions.in Stockholm, one day following the announcement by Washington and Brussels of a trade agreement framework that involved a 15 percent tax on most European Union products entering the United States.
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"The US might think that, once it has largely secured the EU, it will hold more bargaining power when interacting with China," said Cui Hongjian, head of EU studies at Beijing Foreign Studies University.
The European Union has committed to buying $750 billion in American energy over the next three years, along with hundreds of billions in U.S. military hardware, and will invest more than $600 billion above existing levels in the world's biggest economy, according to statements by U.S. President Donald Trump and European Commission President Ursula von der Leyen.
The two parties also decided to eliminate tariffs entirely on various items, such as aircraft, airplane components, specific chemicals, certain generic medications, semiconductor machinery, and some agricultural goods, von der Leyen stated on Sunday.
In contrast to the direct effect of US tariffs, Cui noted that Europe's commitments—be it in terms of investments, energy agreements, or military expenditure—are delayed and may be extended even further.
Europe's strategy is to first appease the US before tackling individual conflicts, relying on the chance of remaining under a possible Trump administration for another four years," he stated. "Numerous of its compromises can gradually be weakened through administrative procedures and renewed negotiations.
The so-called deal is more about words than real content, as Europe provides mostly general long-term assurances. In practice, the true execution of these pledges appears uncertain.
Consequently, there's no necessity for Beijing to respond quickly merely because the US and Europe have finalized an agreement, he mentioned.
"Further investigation is needed. However, Beijing should closely monitor whether Europe attempts to shift the US' attention towards China, utilizing Sino-Western tensions as a means to address transatlantic conflicts," Cui added.
Concerning the US-EU agreement, Guo Jiakun, a spokesperson from the Ministry of Foreign Affairs, stated during a press briefing on Monday that China has consistently supported addressing trade conflicts via balanced dialogue and discussions involving all relevant parties.
"Meanwhile, we strongly reject any party making agreements that harm China's interests," Guo stated.
In addition to challenges posed by US tariffs, the China-EU relationship has remained tense in recent years, even with continuous discussions, as both parties aim to prevent a major trade conflict.
Specifically, the EU has charged China with exporting excess industrial capacity, intentionally saturating European markets with subsidized goods—particularly in key sectors like electric vehicles—and Brussels has stated that this behavior undermines trade and endangers domestic companies.
Senior officials from the alliance arrived in Beijing last week to participate in a top-tier bilateral meeting, during which they also had discussions with President Xi Jinping.
Alicia Garcia-Herrero, the chief economist for the Asia-Pacific region at Natixis, stated that the US-EU trade agreement essentially made clear that Europe would face higher costs when exporting to the United States.
So, Europe will accept the 15 percent tariffs, as others are also doing," she stated. "It's not a significant factor affecting China-EU relations.
After securing agreements with other significant economies, such as Europe and Japan, the United States could take a more rigid approach in trade negotiations with China, as stated by Zhuang Bo, global macro strategist at Loomis Sayles Investment Asia.
However, at the micro level, the 15 percent U.S. tariff on European products still offers Chinese exporters some relief, as Chinese exports could continue to be price-competitive compared to European ones, even with duties that are approximately 30 percentage points higher, according to Zhuang.
Andy Chen, an independent consultant from Tianjin, stated that the US-EU agreement might present strategic challenges for China by redirecting European energy and industrial import priorities toward the United States, possibly weakening China's competitive edge in advanced manufacturing, clean energy exports, and its role in transatlantic investment flows.
"The EU's promise to purchase more than US$750 billion in American energy—likely comprising liquefied natural gas, crude oil, and potentially hydrogen—might push aside Chinese suppliers of solar panels, lithium batteries, and other clean-energy parts," he stated.
He mentioned that the EU's extra commitment of US$600 billion in funding to the United States could displace capital that was previously designated for, or being considered for, China.
"This agreement between the US and EU also indicates a move away from multilateralism towards trade arrangements based on bilateral power dynamics," Chen stated.
However, Su Yue, the principal economist for China at the Economist Intelligence Unit, stated that the agreement might not result in substantial damage to China, as the majority of Chinese and European industries are not directly competing.
"Many of the products that China exports to the United States are not items that Europe manufactures on its own, so I don't perceive clear harm to China from this," she stated.
"One possibility is that Chinese companies intend to establish factories in Europe—such as a component factory in Hungary—to cater to the US market. In such instances, these actions could gain greater strategic significance," Su added.
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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.
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