Increased Sanctions from the EU on China: Will This Move Satisfy Trump?
The European Union (EU) is set to propose additional sanctions against Chinese companies linked to the Kremlin's war efforts, as it navigates a delicate balance between maintaining relations with Washington and preserving economic ties with Beijing.
Historically, Brussels has distinguished between tariffs and sanctions, viewing tariffs as a trade tool and sanctions as a foreign policy tool. However, the current trade tensions between the EU and the US, particularly over Trump's demands for tariffs on China, have raised concerns within the EU.
The EU prefers targeted sanctions against companies linked to the war rather than blanket tariffs. This approach is aimed at minimising potential damage to critical sectors, especially in countries like Germany, whose economy is heavily intertwined with China's.
The EU's skepticism towards Trump's demands for tariffs is palpable. A senior EU official commented, "Ideologically, they [Hungary] are the closest match to MAGA in Europe." This sentiment is shared by many EU diplomats, who question the genuineness of Trump's intentions towards China.
The EU diplomats and officials are concerned that slapping tariffs on China could be economically detrimental for the EU. One diplomat stated, "We would drown." The fear is that tariffs of up to 100 percent on imports from China could fuel sky-high inflation levels in Europe and undermine the EU economy.
In contrast, the EU has been actively working for several years to phase out Russian fossil fuels. The EU's new sanctions measures, expected on Friday, will target crypto, banks, and energy, and a total ban on Russian energy could bolster US ambitions to expand liquefied natural gas exports.
The EU is also looking to make more use of targeted export controls on Chinese firms, particularly those selling military technology to Russia. However, the problem with targeted export controls is that they can reopen under another name, making it a "Whack-A-Mole game," according to Agathe Demarais from the European Council on Foreign Relations.
The specific Chinese companies to be included in the EU's 19th sanctions package have not been explicitly named. However, the package is expected to target companies involved in circumventing sanctions, potentially including those from China and India.
The EU is coordinating closely with the G7, including the US, on the implementation of sanctions, as stated by Olof Gill, the European Commission's deputy chief spokesperson. EU diplomats fear that Trump's demands, particularly the call for tariffs on China, could be a strategy to stall action against Russia and shift blame onto NATO allies.
Several EU countries, including Denmark and Poland, are pushing the EU executive to use Trump's pressure to strong-arm Slovakia and Hungary, which are still buying Russian oil. Brussels is walking a tightrope between keeping Washington onside against Putin while avoiding a rupture with Beijing, on which Europe's economy heavily depends.
Trump is identified as Putin's aggressor in his language on Russia, but Europeans remain skeptical about the genuineness of his intentions. The EU has already dramatically reduced its remaining Russian oil imports, signalling its commitment to countering Russian aggression.
As the EU moves forward with its sanctions against China-linked companies, it will continue to grapple with the complexities of balancing trade, foreign policy, and economic interests in the face of US-China tensions.
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