In war, there are no winners. But when it comes to the imminent trade conflict between the US and China, Europe may well turn out to be the biggest loser. Still nursing the wounds inflicted by their own financial crisis, European businesses are uneasy about this new commercial threat that is lurking. It may put an abrupt stop to the economic upswing of Europe in recent months – the strongest one in ten years, to say the least.
With an economy strongly relying on trade, European businesspeople and politicians fear that newly born import taxes will impede the region’s current economic boom. Their co-dependent relationship with both the US and China has made many European countries wary of the future. The showdown between the two superpowers may drag European businesses down too: ‘collateral damage’ they may say.
European companies are already taking necessary precautions by reducing their economic outlook. In the meantime, China has embarked on a charm offensive, establishing deeper commercial alliances with Europe. But it remains to be seen whether the EU, a long-time ally of the US, will turn its back on its economic accomplice. If, on the other hand, the US and China agree to dissolve existing bans and tariffs, Europe could be in for a patch of bad weather.