Michael Lucci
President Trump’s strong tariffs on Chinese goods effectively suspends most Sino-American trade. China now faces an enormous glut of telecommunications and network-connected equipment, such as 5G equipment, fiber optic cables, telecom parts and various smart devices. It’s largest trading partner, the U.S., is not buying.
This isn’t just a bilateral dustup. China will almost certainly seek to dump its telecom and network-connected equipment on the European Union at fire sale prices. Having lost access to the U.S.’ $23 trillion consumer market, China will see the EU’s $14 trillion consumer market as the only one that can absorb a meaningful share of the glut.
Europe has come to a fork in the road on trade. It’s time to choose a side. The EU should reject China’s bait and build deeper trade alliances with democracies over autocracies.
European corporations have enjoyed a large measure of success in China, with EU exports to China – including motor vehicles and medicine – totaling €223.6 billion in 2023. But the balance of trade has always favored China. The “dual circulation” policy of the Chinese Communist Party (CCP) under President Xi Jinping has been to move toward self-sufficiency and away from purchasing foreign goods, and in recent years, the value of EU exports to China has been on a downward trend.
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