President Trump’s tariffs on China could lead to a hazardous scenario for European countries: the dumping of artificially cheap products that would undermine local industries.
China has for years presented an economic challenge for Europe. Now, it could become an economic disaster.
It produces a vast array of artificially cheap goods — heavily subsidized electric vehicles, consumer electronics, toys, commercial grade steel and more — but much of that trade was destined for the endlessly voracious American marketplace.
Now, with many of those goods facing an extraordinary wall of tariffs thanks to President Trump, fear is rising that more products will be dumped in Europe, weakening local industries in France, Germany, Italy and the rest of the European Union.
Those nations now find themselves trapped in the middle of Mr. Trump’s spiraling trade war with China. Their leaders are straddling a fine line between capitulation and confrontation, hoping to avoid becoming collateral damage.
“The overcapacity challenge has taken a long time, but it has finally arrived in European capitals,” said Liana Fix, a Washington-based fellow at the Council on Foreign Relations. “There is a general trend and a feeling in Europe that in these times, Europe has to stand up for itself and has to protect itself.”
Ursula von der Leyen, the president of the European Commission, has promised to “engage constructively” with China even as she has warned about the “indirect effects” of the American tariffs and has vowed to closely watch the flow of Chinese goods. A new task force will monitor imports for signs of dumping.
