Impasse: Why losing the US still won’t bring Europe closer to China

16 June 2025

“Sooner or later”, the Scottish writer Robert Louis Stevenson once observed, “we all sit down to a banquet of consequences”. For Europe, that time has come, as Donald Trump’s return to the White House has shaken transatlantic bonds even more deeply than during his first term — casting doubt on NATO security guarantees, disrupting trade relations, sidelining Europe from Ukraine peace talks, and emboldening illiberal, anti-democratic forces across the continent.

Confronted simultaneously with Russia’s unending war in Ukraine, China’s unassailable industrial capacity, and Washington’s ideological about-face, European leaders are forced to contemplate the consequences of decades of complacency about the realities of world politics. Hard power has become paramount; the rules governing international trade have proven to be easy to game and even easier to circumvent, and the international liberal order is deeply vulnerable — a made-for-democracies US-led system that powerful autocracies never fully accepted as legitimate, which President Trump wants to scale down radically. “What we had perceived as a world order”, Ursula von der Leyen, the European Commission President, lamented at a recent EU Summit, “is becoming a world disorder”.

No time to celebrate

Long untroubled with its status as “an economic giant, a political dwarf, and a military worm”, Europeans are now confronting the painful realisation that even their “giant” economic status is at risk. Despite its eastward expansion, the EU’s share of the world’s GDP has been shrinking for the last four decades. It is energy-dependent and is a distant player behind China and the US in the all-important AI race. The concern, as Mario Draghi, a former European Central Bank President and author of a major 2024 report on EU competitiveness, put it, is that “over time, we will inexorably become less prosperous, less equal, less secure and, as a result, less free to choose our destiny”.

Viewed from Beijing, the lesson Europeans ought to draw from the situation is clear: a balanced multipolar world would serve their interests better than one subject to the whims of a hegemonic power intent, inter alia, on obstructing China’s rise. By recalibrating its relationship with Beijing, Europe would benefit economically, secure the means for its green transition, and develop its strategic autonomy from a now-proven unreliable American patron. In sum, as Wang Yi, China’s foreign policy tsar, told the audience at the Munich Security Conference in February, “The two sides are partners, not rivals. China is willing to work with the European side to deepen strategic communication and mutually beneficial cooperation, and steer the world to a bright future of peace, security, prosperity and progress”.

The paradox of Sino-European relations is that, while they are fundamentally in poor shape and unlikely to find a way out of their current impasse, they are also remarkably stable.

As luck would have it, this year marks the 50th anniversary of the establishment of the relationship between China and the European Union. In principle, this milestone presents an opportunity for bureaucracies on both sides to orchestrate cost-free goodwill gestures and deliver ceremonial statements emphasising the “long relationship”, “shared interests”, and the importance of “people-to-people exchanges” that can pave the way to diplomatic rapprochement. With President Xi Jinping having made clear that he did not intend to visit Europe this year — at least not anywhere west of Moscow — the European Union amiably agreed to allow China to host the Summit, scheduled for July, even though it was technically Europe’s turn.

Still, Beijing doesn’t hide its strong reservations toward European Commission President Ursula von der Leyen, whom it accuses of adopting a harsher stance on China than the member states she ought to represent. These concerns were reinforced by the appointment last year of Kaja Kallas as the Commission’s new foreign policy chief, a move perceived by Beijing as further evidence of the Commission’s “anti-China bias” as Kallas had been outspoken in describing China as a “strategic rival” of the EU, and has at times associated China with Russia as “malign actors”. But the deeper reason behind Beijing’s aversion to dealing with the Commission lies elsewhere: its positions result from prior intra-European negotiations aimed at presenting a united front, thereby blunting China’s long-standing “divide and rule” strategy of exploiting divisions among individual EU member states.

Trade without trust

There is no doubt that the economic relationship is of tremendous importance to both sides: last year, bilateral trade reached EUR 730 billion. The EU is China’s second-largest trade partner, and China is the EU’s top source of imports, with a trade balance of about EUR 304.5 billion in 2024 in Beijing’s favour. Germany’s long-overdue decision to loosen its “debt brake” to fund major infrastructure and defence investments, combined with the good chemistry between Macron and Merz, is a positive sign for the EU’s growth engine. As the United States restricts access to its market, both China and Europe are eyeing each other’s markets as alternatives for their exports. China needs capital, technology, and know-how that Europe can provide, while Europe seeks investments, green technologies for its energy transition, and low-end industrial goods that it no longer wishes to produce domestically. In theory, economies on both sides could benefit from lower trade and investment barriers.

Reaching agreements that both sides would find acceptable is a tortuous process. Europe fears that China could destroy European companies by flooding its markets with much cheaper — and heavily subsidised — goods, such as Electric Vehicles (EVs), without reciprocating with market access or hampering this access through a thicket of non-trade barriers that are all too familiar to foreign companies operating in China. Xi Jinping’s visible reluctance to let the private sector play a bigger role in the economy and massively subsidise domestic private companies in priority sectors does little to reassure foreign investors.

The EU’s Commissioner for Trade and Economic Security, Maroš Šefčovič, was not as graphic as the US Secretary of the Treasury Scott Bessent in describing the risks of the EU opening further its markets to China (“it would be like cutting your own throat”, Bessent told an audience of bankers last month). But his message during his high-level visit to Beijing last month left no room for ambiguities: “We must ensure that the EU-China relationship is based on a level playing field, in terms of trade flows as well as investment, with symmetrical markets opening”. So wide is the gap between the bloc and Beijing that the EU ambassador to China, Jorge Toledo, recently expressed doubts that the conditions for a planned pre-Summit high-level economic and trade meeting were present. “I’m afraid we are not going to hold it because […] in order to hold it, we need progress. We need deliverables”, Toledo warned.

Having learned hard lessons about the risks of being overly dependent on geoeconomic rivals, the EU recognised the urgent need to reassess its economic vulnerabilities. These lessons came first during the COVID pandemic, when Europe had to implore China for a wide range of everyday products, including medical necessities, and second after the February 2022 invasion of Ukraine, when the extent of its dependence on Russian gas came to light. The third wake-up call occurred during the Biden administration, when the Inflation Reduction Act effectively shut out European firms overnight from vast swaths of the US market. The EU has now diligently audited its economy for critical dependencies, including rare earths, telecommunication equipment, medical supplies and semiconductors, and designed powerful instruments to retaliate against market distortions from trade partners.

The real challenge, however, is the perennial difficulty of forging an agreement among the 27 EU countries, which have very different domestic economic priorities. Germany wants to protect its automobile industry. Hungary has benefited significantly from Chinese investments in EVs and battery plants. Spain is relatively relaxed about using Chinese technology, while France sees an opening to boost its own companies. The 10 years spent negotiating a Comprehensive Agreement on Investment (CAI) between the EU and China, only for it to be blocked at the last minute as collateral damage in a diplomatic spat over China’s policies in Xinjiang, proves the point. Beijing now hopes it can be revived, but that is discounting the biggest obstacle of all in the EU-China relations: the war in Ukraine.

We need to talk about Russia

It is hard to overstate how tone-deaf Beijing’s diplomacy toward Europe has been regarding the Ukraine conflict. At the outset of the war, European leaders quickly resigned themselves to China’s “false neutrality”, recognising that Beijing’s geopolitical need to avoid isolation in the face of the US containment efforts made it unlikely to shift. What they could not accept, however, was China’s insistence that the issue be set aside to create a more favourable climate for diplomatic détente and technical discussions on the economy. For Europe, this would have amounted to downgrading what is an existential concern for the entire continent: security on its eastern flank — an issue with major economic consequences, not least because of the substantial budgetary effort it demands. Given China’s continuous expansion of its role in Russia’s war economy, this is a topic Beijing is keen to avoid delving into.

Over 30 per cent of Russia’s imports now come from China, with bilateral trade reaching a record USD 245 billion in 2024 — double the level of 2020. Crucially, an analysis of Chinese customs data reveals that Beijing exports more than USD 300 million worth of dual-use items to Russia each month, encompassing a range of products, including drones, semiconductors, and mechanical equipment. In response, the EU sanctioned 19 Chinese companies in 2024 for directly “supporting Russia’s military-industrial complex”.

Beijing’s misreading of the situation runs even deeper. For Europeans, the core issue is not Ukraine — it’s Russia. Even if the war in Ukraine were somehow resolved, the threat posed by Russia would persist. While it’s true that some governments have used this risk to justify higher defence spending, the reality is that many European capitals are genuinely alarmed by Vladimir Putin’s intentions. Their concerns are reinforced by a sharp rise in Russian grey-zone activities across Europe, from sabotage and espionage to disinformation campaigns and even political assassinations.

From Beijing’s perspective, Washington’s reversal on Ukraine — from “whatever it takes, as long as it takes” to “this was a European situation and should have remained a European situation” as President Trump recently put it — signalled that China’s stance on the conflict should no longer be regarded as reprehensible. In this view, Europe should likewise desist from criticising Beijing’s refusal to exert pressure on Moscow. Fu Ying, a former vice foreign minister and now a fixture on the international think-tank circuit, recently encapsulated China’s perception after returning from the Munich Security Conference, writing that Europe was subject to “bias and misperceptions” and “both emotionally and politically locked into supporting Ukraine and countering Russia”.

What China misses is that Washington’s decision to end its unqualified commitment to the continent’s security makes the threat posed by Russia more, rather than less, acute for Europe. Far from being an “emotional” issue, it is nothing short of an existential one. A deal unfavourable to Kyiv would effectively reward Moscow for its invasion while simultaneously weakening the Ukrainian bulwark, thereby keeping Russia at bay. In other words, Europe is currently losing on both the reassurance and the deterrence fronts towards Russia.

For Europeans, China’s ever-deepening embrace of Moscow has implications that go far beyond Ukraine: this “no-limit partnership” between “true friends of steel”, with reciprocal state visits bookending the EU-China summit — Xi in Moscow earlier this month, and Putin in Beijing in August — advances a clear anti-Western agenda and open ambitions to reform the international order away from its post-war liberal foundations. At the United Nations Security Council, the two countries now almost systematically align their positions, with China taking a much more assertive role, including in blocking European-supported initiatives. To the extent that these concerns are “political” or “ideological”, Europe is indeed guilty of having a strong preference for a rules-based order that frowns on the use of force and favours attention to non-traditional security dimensions, such as climate change, humanitarian and human rights crises, and democratic resilience.

Bad, but stable

The paradox of Sino-European relations is that, while they are fundamentally in poor shape and unlikely to find a way out of their current impasse, they are also remarkably stable. Both sides trade extensively with each other, share a strong preference for a rules-based order (even if they disagree on how constraining these rules should be), resent Washington’s whiplash approach to international affairs, and invest in cultivating regional partners to balance one another — India and Japan for Europe, the Western Balkans and Turkey for China. Most importantly, they are not military adversaries, having no geographical points of contact.

This is particularly remarkable given how profoundly disruptive the Trump administration has been to the international system. American fears that Europe could seek to align itself more closely with Beijing or that “Trump is pushing Europe and China into each other’s arms” are largely overstated: no matter what, Europe remains in the orbit of the US unmatched combination of economic, military, technological, and cultural power, and shares more values with America than with China. Meanwhile, no matter how much China aspires to be a global leader on the international stage, Beijing has no choice but to stick to its unsavoury but only reliable ally of size in the face of intensifying the US geopolitical rivalry.

Rather than a genuine rapprochement, Sino-European relations are likely to remain narrowly confined to areas deemed free of strategic risk by both sides, with no major upsets expected in either direction. For Europe, however, the greatest challenge may lie not in managing its relationship with Beijing, but in forging coherent positions among European countries — starting with the 27 EU member states — not only in its dealings with China and the United States, but more fundamentally in finding ways to keep its economy globally competitive.

Should Europe fail to achieve greater unity, it may soon find itself once again invited to the banquet of consequences — only this time, with even higher stakes and even starker choices.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Nicholas Bequelin is a senior fellow at Yale Law School’s Paul Tsai China Center and the former Asia-Pacific director of Amnesty International. Image credit: Dati Bendo © European Union, 2025, CC BY 4.0.