EU and China on the brink of trade war

Is the EU finally waking up!

(1) EU and China on the brink of trade war | DW News - YouTube

Is President Trump starting a trade war with the EU about e.g. excessive fines against US tech companies?

Serious stuff! Is the EU excessively fining US tech companies using a pretext? Is this sort of an extra source of revenue for the EU?

Does the US fine EU companies in a similar fashion or to a similar extent? I doubt it.

"Trump vs. the EU: Section 301 Investigation Launched. After years of watching the European Union levy billions in unjustified fines against America’s greatest technology companies, President Trump signed a Presidential Action this week initiating Section 301 investigations into the trade practices of 60 economies, with the EU squarely in the crosshairs.

The final straw: a fresh $1 billion fine against Google, bringing the EU’s total Google fines alone past $18 billion.

Combined with $15 billion against Apple, $3 billion against Meta, and $2.5 billion against Amazon, the systematic targeting of American companies is over. President Trump announced that the penalties will be reversed, a substantial tariff is coming, and the EU will pay a “very big price.”"

White House Weekly Briefing | July 20–26, 2026 — 57-Year Record Jobless Claims Low & Ratepayer Protection Pledge

EU adds hefty anti-dumping duties to 1,4-butanediol against China, Saudi Arabia, and US

Is the long lasting prosperous era of free trade since 1945 coming to an end? Is a spiral of trade protectionism measures building up?

What will come next? A trade war?

Presented as an "anti dumping" measure.

"The European Commission has introduced massive antidumping duties on imports of 1,4-butadiene (BDO), an important intermediate molecule in chemical manufacturing. The provisional duties are 106–114% on all imports originating in China, 52% for all imports from Saudi Arabia and 136–143% on all imports originating in the US. ..."

EU adds hefty anti-dumping duties to 1,4-butanediol | Business | Chemistry World "Imports from China, US and Saudi Arabia will see tariffs of 52–143%"

COMMISSION IMPLEMENTING REGULATION (EU) 2026/270 of 4 February 2026 "imposing provisional anti-dumping duties on imports of 1,4-Butanediol originating in the People’s Republic of China, the Kingdom of Saudi Arabia and the United States of America"

1,4-butanediol is a key intermediate and component of in various coatings, polymers and solvents

China imposes export controls on drug precursors to US, Canada, Mexico

Why did it take so long? 

Was the delay due to the senile, demented and corrupt 46th President!

Why did President Trump not achieve this already in his first term?

"China's government on Monday announced export controls on drug precursor chemicals to the U.S., Canada and Mexico, after the U.S. lowered its fentanyl-related tariffs on Chinese goods. ..."

China imposes export controls on drug precursors to US, Canada, Mexico - Nikkei Asia

Tech war: China finds US chip giant Nvidia violated anti-monopoly law

Clearly, China is playing hardball and escalates the trade war between the US and China.

See also my related blog post from two days ago!

"China’s antitrust regulator said on Monday it found Nvidia in violation of the country’s anti-monopoly law and would proceed with further investigation, which could lead to punitive actions against the American chipmaker amid escalating technology rivalry with the US."

Tech war: China finds US chip giant Nvidia violated anti-monopoly law | South China Morning Post "The initial investigation lays the groundwork for Beijing to potentially take further action against Nvidia"

China declares anti-dumping probe into US analog chips

Bad news! A new round in the upward spiral of the current trade war between two of the world's largest economies? Where will this end?

How will the European Union (EU) react?

Reminder: The Communist Party of China has craftily exploited the Western created global free trade system for significant annual net trade surpluses for years. Also called foreign trade dumping! According to Google search: "China has historically run trade surpluses since around 1995, with a significant and growing trend in the 2020s, reaching records over $1 trillion in 2024 and 2025, primarily driven by expanding exports despite slowing import growth."

"China on Saturday announced an anti-dumping probe into imported American analogue integrated circuit (IC) chips and also initiated an anti-discrimination investigation over Washington’s handling of Chinese semiconductors. ..."

China declares anti-dumping probe into US analogue chips | South China Morning Post "Beijing also initiates anti-discrimination investigation over US handling of Chinese semiconductors, a day ahead of latest trade talks"

China issues anti-dumping ruling on European pork, charges deposits

The trade wars are heating up! Progress on global free trade, pursued since 1945, is suffering another setback!

Well, the Communist Party of China has practiced mercantilism for several decades without much resistance from the West.

"China has made a preliminary determination that Europe is dumping pork and pork by-products into its market, causing “material injury” to the domestic industry, Beijing’s Ministry of Commerce said on Friday. ..."

China issues anti-dumping ruling on European pork, charges deposits | South China Morning Post "Ministry of Commerce says importers covered by preliminary judgment must provide cash deposits with shipments"

Trump Announces Tariffs against 14 countries, ranging from 25% to 40%, Posts Letters Online

Wow! Worrisome! Next round in the new, ongoing trade war since the second term of President Trump.

I would agree that too many trading partner countries of the US have imposed too many and considerable non-tariff trade barriers over the past several decades. These many non-tariff trade barriers were introduced by many countries in violation of international trade agreements, despite many international trade conferences and despite World Trade Organisation etc..

On the other hand, we also have World War III going on in the Ukraine and a military conflict with Iran at the same time. How do you define a powder keg? Hope and pray there will not be a major escalation!

"President Trump announced new tariffs of up to 40% on goods from 14 countries, set to take effect Aug. 1, as part of his push for reciprocal trade terms.

Trump posted letters on Truth Social addressed to the affected countries announcing steep new tariffs—ranging from 25% to 40%—on imports from countries including Japan, South Korea, and Malaysia, warning that any retaliation would trigger even higher rates. ..."

Tuesday, July 8, 2025 - Join The Flyover

China-EU trade tensions rise as Beijing levies anti-dumping tariffs on European brandy

Let the trade wars begin or is this still just some tit for tat? This could become serious stuff! Will things get better again before they worsen e.g. in a downward spiral?

Are we entering a new era of trade protectionism like before the Great Depression of the 1930s?

China-EU trade tensions rise as Beijing levies anti-dumping tariffs on European brandy | South China Morning Post "Announcement comes as Foreign Minister Wang Yi is in Europe trying to resolve trade disputes, and one analyst says Beijing is ‘clearly disappointed by the EU playing hardball’"

China open to talks with Trump admin on lowering tariffs, Chinese Commerce ministry says

Good news!

"China is "evaluating" an offer from the U.S. to hold talks on tariffs, according to a Friday statement from the Chinese Commerce Ministry. This shift in tone could leave the door open for the world’s two largest economies to deescalate the trade war that has left global markets in turmoil. ...

On Thursday, Treasury Secretary Scott Bessent told Fox Business’ Maria Bartiromo on "Mornings with Maria" that he believed Beijing was looking to reach an agreement with the U.S. ...

However, the [China] recently waived the tariff on a host of American-made products. 

There were already exemptions for some pharmaceuticals, microchips and aircraft engines, but China added an exemption for ethane imports, according to Reuters. ..."

China open to talks with Trump admin on lowering tariffs, ministry says "Beijing warned that using the talks as a 'pretext to engage in coercion' will not work"

'Only going to get worse': China’s export orders plunge amid trade war with Peter Schweizer

Recommendable!

Desperate countries already cave to Trump’s tariffs

Israel, Canada, India, Vietnam, Argentina, UK, Mexico ...

Maybe it is working!

How Canada/Mexico Tariffs Would Harm the US Auto Industry (and American Car Buyers)

Bad news! Some auto parts criss-crosses borders multiple times. Will the new tariffs be applied cumulatively?

"... decades of free trade have caused the US, Canadian, and Mexican automotive industries to be highly integrated, with producers in all three countries shipping finished goods and parts across the United States’ northern and southern borders. ...

The North American automotive supply chain is so interwoven across all three USMCA countries that an engine, transmission, or other automotive component might cross the US-Canada and US-Mexico borders as much as seven or eight times before it ends up in a finished vehicle. As a 2017 Bloomberg report documented, this dynamic applies not just to complex parts but relatively simple ones too. In particular, the authors tracked the journey of a capacitor, a simple electrical component in a circuit board, incorporated into a car seat. As Figure 6 shows, by the time the capacitor was embedded in a finished seat, it had already crossed from one North American country to another four times. ..."

Seven Charts Showing How Canada/Mexico Tariffs Would Harm the US Auto Industry (and American Car Buyers) | Cato at Liberty Blog

China hits back at US tariffs with vow to take case to the WTO and impose countermeasures

China did not wait very long to respond! Are we now in a trade war? How serious will it get? What will be the outcome?

"China will file a claim with the WTO and take necessary countermeasures to safeguard its interests, the Ministry of Commerce said on Sunday after the US announced it would impose 10 per cent tariffs on goods from China.

“The unilateral tariff hikes by the US seriously violate [World Trade Organization] rules,” the ministry said, adding that the move “not only fails to address America’s own issues” but also “disrupts normal China-US economic and trade cooperation”. ..."

Breaking | China hits back at US tariffs with vow to take case to the WTO | South China Morning Post "Decision by Trump administration to impose 10 per cent tariffs on imports from China ‘disrupts normal China-US trade’, Ministry of Commerce says"

Lockheed Martin, Raytheon hit as China slaps dual-use export ban on 28 US defence firms

Is China already responding in kind before Trump is sworn in?

Hopefully, there will be no trade war! Trade wars can get very nasty and affect many people!

Lockheed Martin, Raytheon hit as China slaps dual-use export ban on 28 US defence firms | South China Morning Post "Ministry of Commerce announces move on Thursday, with 10 of the firms also placed on unreliable entities list over Taiwan arms sales"

Beijing to slap visa curbs on US officials for ‘behaving poorly’ on Hong Kong

A trade war between China and the US has already begun even before Trump is sworn in! This is just another measure taken by China.

I blogged here, here about other recent measures by China. It appears China wants to send a strong message to Trump before he comes into office.

Trade wars can be nasty and may cause many loosers!

"Beijing will impose visa restrictions on “US personnel who have behaved poorly on Hong Kong-related issues” in response to Washington’s threats to sanction officials responsible for implementing the national security law, China’s foreign ministry has said. ..."

Beijing to slap visa curbs on US officials for ‘behaving poorly’ on Hong Kong | South China Morning Post "Foreign ministry spokeswoman Mao Ning says Beijing has stated its position to the US"

China is investigating Nvidia over possible antimonopoly violations

Is the trade war between the US and China heating up?

Trade wars are nasty and have many losers!

"The move came a week after the U.S. further restricted Beijing’s access to high-end semiconductors, and industry watchers said it was aimed at sending a message that China won’t stand by when targeted. Shares of Nvidia, which makes most of the cutting-edge chips that power AI servers, closed down 2.5%, though they’re still up 180% for the year. The company said that it’s happy to answer Beijing regulators’ questions."

The Wall Street Journal What's news

China bans sale of three critical elements and ‘superhard materials’ to the US and sanctions against 13 US companies over weapons sales to Taiwan

The trade wars have begun! And Trump is not even in office yet!

"The Chinese government has banned the export of critical minerals to the US that are crucial for semiconductors, military equipment and other industries. The critical elements include gallium, germanium, antimony and ‘superhard materials’ such as diamond, cubic boron nitride and other related materials. ..."

China bans sale of three critical elements and ‘superhard materials’ to the US | News | Chemistry World

Mainland China sanctions 13 US companies over weapons sales to Taiwan

Incoming President Trump threatened any BRICS country with a 100% tariff that try to replace the dollar as the main currency for settling global trade transactions. Really!

I think, Trump is dangerously overdoing it using tariffs as a weapon whenever it suits him! Most likely, he is also overestimating the effectiveness of this instrument!

The world has gained a lot of prosperity after World War II by instituting as much free trade as possible among as many countries as possible. Trump has just upset the NAFTA.

Trade wars can get very nasty quickly and many people will lose!

"The president-elect said in a post on X over the weekend he would impose 100% tariffs on countries that try to replace the dollar as the main currency for settling global trade transactions. Meanwhile, some U.S. steelmakers are pushing Trump for even more tariffs, and a freight railroad merger that connects Canada, the U.S. and Mexico now finds itself on the wrong side of Trump’s tariffs."

The Wall Street Journal What's news

The language by Trump is totally inappropriate! Is he out of his mind?

No trade is free: Changing course, taking on China. Really!

Abandoning the post-WW II era of promoting the very successful global free trade is not advisable!

It seems the pendulum is swinging again from free trade and global prosperity back to more managed trade and protectionism again. It also counters the great opening towards China in 1972 by then President Nixon and Henry Kissinger.

A trade war between the US and China should be avoided! Foolishness is not free either!

If communist China is indeed price dumping or subsidizing exports or resorting to other manipulative measures, then this should be addressed directly and openly! However, the US is not quite innocent either of foul trade practices.

The 47th President (presumably Trump) would be well advised not to heed too much to these hawks!

Intercollegiate Studies Institute newsletter: How do we respond to China?

Robert Lighthizer's recent book (believed to be published in 2023)