{"id":113486,"date":"2026-06-22T02:24:46","date_gmt":"2026-06-22T02:24:46","guid":{"rendered":"https:\/\/www.europesays.com\/dk\/113486\/"},"modified":"2026-06-22T02:24:46","modified_gmt":"2026-06-22T02:24:46","slug":"if-brussels-starts-a-trade-war-beijing-will-finish-it-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/dk\/113486\/","title":{"rendered":"If Brussels starts a trade war, Beijing will finish it \u2013 The Irish Times"},"content":{"rendered":"

It\u2019s showdown time. This week, European Union (EU)<\/a> leaders meet in Brussels to decide how to take on China <\/a>over trade. Then again, these days it\u2019s always showdown time. For years the EU has become increasingly alarmed at China\u2019s dominance of green tech and its interventionist trade and industrial policy but done little to combat it. <\/p>\n

Internal divisions have restrained EU assertiveness. Germany and Spain, wanting to protect, respectively, exports to and inward electric vehicle investment from China, stand ready with buckets of cold water to cool down what they see as hot-headed trade warriors. <\/p>\n

Tools like the anti-coercion instrument (ACI), which could give legal cover for a wide range of retaliatory actions, remain unused.<\/p>\n

But even if consensus is achieved, Europeans should learn from Donald Trump\u2019s experience and refrain from aggressive actions likely to lead to escalation. <\/p>\n

Last October the US president impetuously threatened huge tariff increases but then rapidly backed down after China started to bring US factories to a halt by cutting off exports of rare earth elements such as dysprosium.<\/p>\n

Beijing clearly demonstrated \u201cescalation dominance\u201d \u2013 superior firepower in all-out trade war.<\/p>\n

\"\"Will a Middle East peace deal make any difference to inflation? <\/p>\n

The same is likely to apply to Europe, which experienced collateral damage in last year\u2019s conflict. I recently attended a tabletop simulation of an EU-China trade war based on an assessment of Europe\u2019s economic and political realities. <\/p>\n

Assorted think-tankers, academics and similar types variously took the parts of the commission, the council \u2013 which collectively represents the member states \u2013 some individual EU governments, China and side characters like the US and Japan.<\/p>\n

[\u00a0EU leaders gather for talks set to cover Ukraine, Israel and ChinaOpens in new window<\/a>\u00a0]<\/p>\n

The participants playing the commission tested out a strategy of confrontation, wanting to threaten sharp increases in tariffs and to encourage the ACI to go after one of China\u2019s genuine weaknesses \u2013 its dependence on lithographic semiconductor manufacturing machinery from the Dutch company ASML. <\/p>\n

But the position was undercut by Germany and Spain urging caution. The Netherlands representatives at first seemed open to further restricting ASML sales to China but then got cold feet about endangering their national corporate jewel.<\/p>\n

Even a watered-down version of the commission proposal met a fierce response from the China participant, including threatening to cut off rare earths and reminding the Europeans of their pharmaceutical industry\u2019s dependence on Chinese raw materials. <\/p>\n

The eventual consensus EU position accepted a somewhat vague China counterproposal for Beijing to present plans in two months\u2019 time to reduce overcapacity and to undertake a small fiscal stimulus to rebalance the trade deficit.<\/p>\n

[\u00a0European Union and China tooling up for trade war that could hurt bothOpens in new window<\/a>\u00a0]<\/p>\n

A postmortem revealed the China participant had not felt seriously threatened by anything the EU said and was confident Beijing could kick the can down the road again two months later.<\/p>\n

Researchers have argued, with justification, that the EU can exploit a variety of Chinese dependencies on Europe. But the war game suggests that even with the ASML threat there remains what one participant called a \u201ctimeline disconnect\u201d in a high-level trade conflict.<\/p>\n

Cutting China off from lithographic machinery might have some limited impact in a few months, but Beijing can weaponise rare earths severely to hurt European car production within weeks. At that point any EU stomach for a fight would surely develop severe indigestion.<\/p>\n

So what to do, apart from not starting from here? Even apparent solutions like precautionary stockpiling of critical minerals have problems.<\/p>\n

China\u2019s rare earths export controls regime requires end-user licences, enabling Beijing to withhold sales from any buyer it suspects of insulating itself against coercion. China really has thought this through very well.<\/p>\n

There is no real answer except the EU insulating itself by developing a more resilient industrial sector and reducing dependence on rare earths. It\u2019s a project for years or decades and will need carefully designed industrial policy that minimises trade distortions and doesn\u2019t provoke China into retaliating.<\/p>\n

The temptation for the EU to start a trade war to hit back at Chinese manipulation is strong, but this strikes me as an example of the politician\u2019s syllogism. (First premise: we must do something. Second premise: this is something. Conclusion: we must do this.)<\/p>\n

I would bet a kilo of dysprosium that this week\u2019s EU meeting will come out with something vaguely threatening but unspecific. As William Shakespeare had his tragic hero King Lear impotently rage: \u201cI will do such things \u2013 what they are, yet I know not: but they shall be the terrors of the earth.\u201d<\/p>\n

I\u2019m not offering a counsel of despair nor a call for indefinite passivity. I do, however, suggest that the EU realistically assess its weaponry before charging into battle against a fearsomely well-organised opponent. \u2013 Copyright The Financial Times Limited 2026<\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s showdown time. This week, European Union (EU) leaders meet in Brussels to decide how to take on…\n","protected":false},"author":2,"featured_media":113487,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[104],"tags":[211,26600,210,2433],"class_list":["post-113486","post","type-post","status-publish","format-standard","has-post-thumbnail","category-brussels","tag-belgium","tag-bob","tag-brussels","tag-media"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@dk\/116791388839508764","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/113486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/comments?post=113486"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/113486\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media\/113487"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media?parent=113486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/categories?post=113486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/tags?post=113486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}