Name : Renata Pricilla Panggalo

ID : 2101661206
Class : LA66
Course : INTR8030 – Political Economy
and Regional Intergration in
Europe
Lecturer : Sabaria Catharin Debora

EU Response towards US and China Trade War: Which

Side Should EU Chose?
The trade war between United States and China impacts the European firms economy
negatively. The ongoing tension between US and China negatively impacted one-third of the
European companies located in China, according to The European Union Chamber of Commerce
in China. A study conducted in January and February involving 585 EU-based firms in China
publishes its results which are contrary to expectations that European companies would benefit
from the duties. The Vice President of European Union Chamber of Commerce, Charlotte Roule
said that the European chamber disagrees with tariffs, and further suggested China to open its
market to foreign companies.

The study showed that one of the key problems European companies currently facing is
the forced technology transfer, which also stressed by Charlotte Roule. 20% of the survey
respondents agreed that they felt compelled to transfer technology in order to maintain market
access. The field of chemicals and petroleum, medical devices, pharmaceuticals and automotives
are the ones who burdened with this unfair technology transfers. There is also a problem in terms
of intellectual property legal protections. Over half of European companies who joined the
survey said that the legal protections to intellectual property are inadequate. In addition, 45% of
respondents also admitted that they suffer ‘unequal treatment’ compared to their Chinese
counterparts. Roule also added that addressing market access barriers and regulatory challenges
are the fundamental issues that are driving the trade war (DW, 2019).
 Trading with US, however, also have obstacles as well. The tariffs imposed by the US are
not in the EU’s favor. According to French President Emmauel Macron, the meeting between EU
Commission Chief Jean-Claude Junker and US President Donald Trump were useful, but Junker
was not in favor of a new trade deal with the United States (Ng, 2018). The European
Commissioner for Trade Cecilia Malmstrom has stated the European Union’s response to the US
tariffs for steel and aluminium. There are three parts of the responses. First, the European Union
has challenged the tariffs imposed by the US in the WTO. Secondly, the EU has developed a list
of products that might apply balancing tariffs on imports from the US. However, most of the
tariffs might only apply according to WTO rules, which is after three years of proposal. Lastly,
the European Union has implemented safeguards to prevent damage such as redirected steel and
aluminium from the US from distorting the EU market and undermining EU producers.

This essay has provided the explanation regarding impacts caused by trade war to the
European Union. A question that is worth to ask is on which side should the EU chose later on.
There are many speculations going on either the EU should stay with its ally the US despite of
rising protectionism act on trade, or re-evaluating its relationship with the third global economy,
China. This condition caused the EU in a very awkward position. The EU might contain the
impacts of US increasing tariffs by establishing deeper economic relations with the rest of the
world, and continue efforts to communicate that trade is not a zero-sum game in order to
generate equitable distribution of value (Demertzis & Fredriksson, 2018).

Bibliography
Demertzis, M., & Fredriksson, G. (2018). The EU Response to US Trade Tariffs. Retrieved June
3, 2019, from Intereconomics Web site:
https://archive.intereconomics.eu/year/2018/5/the-eu-response-to-us-trade-tariffs/
DW. (2019, May 20). One-third of EU firms hit hard by US-China trade war. Retrieved June 3,
2019, from DW: https://www.dw.com/en/one-third-of-eu-firms-hit-hard-by-us-china-
trade-war/a-48800905
Ng, T. (2018). Why Europe is not ready to take sides in the US-China trade war. Retrieved June
3, 2019, from South China Morning Post: https://www.scmp.com/news/china/diplomacy-
defence/article/2159100/why-europe-not-ready-take-sides-us-china-trade-war