Illustration: Xia Qing/GT

With the new US administration taking office, there has been a danger of increased trade tensions and even a trade war worldwide. The US government has been using or threatening to use tariffs as a means to achieve its goals, targeting China and the EU, among others. Under pressure, European countries are expressing concern about possible increases in imports from China, referred to as the "China Shock," which they believe need to be prevented. 

The concern is not well-founded, judging by Donald Trump's first term as US president. Higher US tariffs on China did not trigger a systemic increase of Chinese exports to the EU. From 2018 to the first 10 months of 2024, the share of exports to the US in China's total exports decreased from 19.2 percent to 14.6 percent. During the same period, the share of exports to the EU rose only slightly from 14.2 percent to 14.6 percent. Although the EU has been buying more from China, its total imports have expanded by a reasonable 16.6 percent since 2018. 

Following the outbreak of the Ukraine crisis, the EU has been importing more from various countries and regions, with China accounting for only a small portion of this increase. Furthermore, the fluctuations in trade are largely due to changes of trade mix, as the increase in imports from China mainly comes from parts that used to be taken by other economies. 

What has truly resulted from higher US tariffs is a new round of global trade shifts. With dwindling Chinese exports to the US, the EU has been increasing its sales to the country. This situation is a double-edged sword: On the one hand, the EU benefits from increased exports to the US, while on the other, it exposes itself to the risk of higher tariffs. Germany's exports to the US have reached a record high, with 1.2 million German jobs dependent on these exports. However, 300,000 German jobs could be at risk if the US imposes additional duties. 

It is estimated that if the US levies a 25 percent tariff on German cars, German auto exports to the US will drop significantly by 7.1 percent. It appears that depending more on the US market while de-risking from China does not serve the EU well as intended.

The headaches for Europe stem from the US and no one else. US restrictive measures have led to shifts in international supply chains and changes in trade shares. Instead of adopting a protectionist approach out of fear of diverted trade, countries should work together to urge the US to change its way. Lessons have been learned from history. During the Great Depression, in response to US trade restrictions, other economies decided to raise tariffs on third parties, causing a chain reaction that resulted in severe contraction of global trade and a more depressed global economy. That is why since WWII, countries have worked jointly to reduce trade barriers, establish rules and principles, and uphold a multilateral trading system which is the appropriate response to the US protectionist stance today. 

Back to China and the EU. China's exports are beneficial to the EU. In a recent speech in Davos, European Commission President Ursula von der Leyen recognized the mutual benefit of China-EU trade and investment and expressed an interest in expanded China-EU economic relations. 

In the wake of the Ukraine crisis and rising energy prices, China's affordable goods sold to Europe have helped ease inflation, making life easier for the people of Europe. China and the EU are complementary in many areas, and increased trade will better meet the needs of European markets. China's green energy products will help accelerate the EU's green transition, and at the same time more cooperation between European and Chinese industries will contribute to the improvement of European competitiveness on the global markets. 

What China seeks is the win-win result of China-EU trade. Overall, the question is not what Europe should do to stop more imports from China. Rather, the question is what Europe can do with China to solve the problems and find a way toward shared prosperity.

The author is an observer of international affairs. opinion@globaltimes.com.cn