China and US: trade tensions and international implications

Translated by Alessandra Fumagalli 

In 2024, trade tensions between European Union and China are at the most significative peak, and reflect a substantial change in the global geoeconomic dynamics. The development of such relationships highlighted a number of complex and interconnected issues, going from industrial policies to technology security, influencing the economic, geopolitical and global stability. 

The trade tensions between People's Republic of China and Unites States of America started on 22nd March 2018, when US's President Donald Trump wanted to impose customs duties of 50 billion dollars on Chinese products, invoking Section 301 of the Trade Act of 1974. This was justified by "incorrect trade activities" and by the presumed intellectual property theft by the Chinese government and businesses. Nowadays, the situation is everything but improved. 

One of the main source of tension is the China's perception, spreading throughout the European Union, as a strategic competitor, whose economic model, based on government subsidies, forced technology transfers and other unfair trade practices, threatens European business' competitiveness. This led to a reinforcement of the commercial defense policies and the promotion of major trade relationships with China. EU has already adopted in 2023 a number of initiatives, aiming at protecting its economic interests and promoting a loyal competition on the global market. Among these measures, the implementation of new rules for the screening of foreign direct investments has been intensified, in order to protect EU's key sectors. However, tensions went beyond economy. The technology security emerged as a significative point of contention, especially with the developments of 5G nets. 

EU is worried about the presumed addiction on Chinese supplier, like Huawei in telecommunications sector, increasing other measures in order to safeguard the European infrastructures.  

China's response was diversified, and it included restrictions on European investments and trade fines to those EU Member Countries that worried about human rights in China. This brought to an uncertain atmosphere and mistrust, questioning the sustainability of the economic and trade relations between the two parties. Trade tensions between EU and China are impacting the global geoeconomic panorama, influencing international financial markets and trade strategies of other countries. For this reason, it is fundamental to adopt an approach, aiming at promoting the mutual comprehension and collaboration, in order to mitigate the risk of escalation and support the global, economic and geopolitical stability. 

In conclusion, in 2024 trade tensions between EU and China are one of the main challenges in the geoeconomic view. Facing efficaciously these tensions requires a joint engagement, to solve the disagreements though a constructive dialogue and the cooperation, in order to promote a sustainable economic growth and preserve the stability of the international trade system.

Mondo Internazionale APS - Riproduzione Riservata ® 2024