Can Europe win a trade war with China? It may depend on how victory is defined

Europe is quietly preparing for a potential trade war with China, driven by a determination in Brussels to shield the bloc's manufacturing heartlands from what is being termed "China Shock 2.0." With some industries already experiencing significant job losses, the European Union's strategies for building resilience and de-risking now incorporate deterrents designed to counter potential trade coercion by Beijing.

The EU aims to acquire leverage and credible retaliatory tools to respond effectively if China employs trade as a coercive measure. This proactive stance reflects growing concerns about economic dependencies and the potential for unfair trade practices.

Analysts hold differing views on the current state of trade relations. Some argue that a trade war is already in progress, while others believe the two sides are still bracing for an inevitable conflict. A segment of experts also advocates for avoiding such a confrontation at all costs. The central question emerging is whether Europe could ultimately emerge victorious from such a trade dispute.

Unlike the assertive stance of former U.S. President Donald Trump, who famously stated that "trade wars are good, and easy to win," there is less hubris evident in Brussels. During a recent parliamentary hearing, Denis Redonnet, the EU's top trade enforcer, emphasized the importance of engaging with Beijing to "avoid sleepwalking" on multiple levels, suggesting a cautious and strategic approach to managing the complex relationship.

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to avoid sleepwalking at two levels