Trump’s protectionist policies could push Europe toward China

Tensions between the U.S. and Europe have hit something of a low in recent weeks — and China could be poised to use the spat to bolster its relationships on the continent.

Transatlantic strains came to head last week during a disastrous meeting between U.S. President Donald Trump, Vice President JD Vance and Ukrainian President Volodymyr Zelenskyy in the Oval Office. What started out as a potential signing of a critical minerals deal ended in a public shouting match.

Trump has also made repeated threats of tariffs on EU imports and said that the bloc was “formed to screw the United States.” Vance, meanwhile, lambasted Europe last month at the Munich Security Conference, saying he was worried about “the threat from within.”

This strain in the so-called “special relationship” has seen Beijing become an unexpected ally and advocate for Europe, with Chinese Foreign Minister Wang Yi visiting the continent last month to urge for closer ties and more cooperation. 

“China is clearly responding with a charm offensive, trying to portray itself as a stabilizing force and a potential alternative pole, exploiting European fears and hoping for a reset on Beijing’s own terms,” Alicja Bachulska, policy fellow at the European Council on Foreign Relations, told CNBC by email.

After both the EU and Ukraine were shut out of surprise U.S.-led peace talks with Russia, Wang said at the Munich Security Conference that China hopes all parties can participate in peace talks to end the war in Ukraine. “As the war is taking place on European soil, it is all the more necessary for Europe to play its part for peace,” he said in comments reported by Reuters.

For Beijing, expressing support for Europe’s role in the Ukraine peace negotiations is a “low cost way” to signal its respect for the EU and “draw contrast with Trump,” according to Gabriel Wildau, managing director at Teneo.

“China aims at gaining strategic influence over Europe, as their investment and trade policies demonstrate. The forays in the context of Ukraine should be assessed in that light,” Ian Bremmer, president of political risk consultancy Eurasia Group, told CNBC via email. 

As Trump doubles down on protectionist policies, analysts say China stands to gain from a Europe free from U.S. pressure to impose sanctions and restrictions against Beijing. 

Europe has historically broadly aligned with U.S. trade policies designed to protect Western tech innovations and its economic interests.

Take Dutch chip equipment maker ASML, for example, whose sales of advanced semiconductor manufacturing equipment has been restricted by the Dutch government following U.S. export controls.

“A lot of Europe’s clamping down on China was at the request of the U.S. That, in a sense, is part of the price of being subjugated … and dependent on the U.S. for defense,” David Roche, strategist at Quantum Strategy, told CNBC in a call. 

“The Europeans may be getting hit [by potential tariffs], but they will no longer be slaves to the Americans,” Roche said.

A fractured transatlantic alliance could therefore benefit Beijing, as Europe becomes “less susceptible” to U.S. pressure, said Teneo’s Wildau, which may lead to a rollback of existing export controls or at least the halting of new ones.

One example of a change in trade policy could be the European Union’s current tariffs on Chinese vehicles, according to Wildau, who said the bloc’s leaders might conclude that they have “no choice” but to reverse course.

The European auto industry has been under increasing pressure as carmakers battle with multiple headwinds ranging from the transition to electric vehicles, rising competition from China and now the threat of U.S. tariffs. 

Chinese cooperation could help Europe manufacture the parts needed for its EVs, enabling the bloc to catch up with the technology and meet its sustainability goals, Roche suggested – with this just being one gap that China could potentially fill.

“The reality is, in the broadest sense of the word, Europe has to look for alternative markets to the U.S. China can help,” Roche added.

President Trump’s recent moves have stirred leaders in Europe, with Germany’s Friedrich Merz telling public broadcaster ARD in a speech after his party’s victory last week that the U.S. is now “indifferent” to the fate of Europe, and that his priority is for Europe to “achieve independence from the USA.”

“Merz’s comments will not go unnoticed by Beijing,” Thanos Papasavvas, founder and chief investment officer at ABP Invest told CNBC via email: “The key question here is whether Germany’s traditional business relationship with China would also be seen in the same vein by other member States.”

Some analysts say it is unclear how much progress can be made in repairing what has long been a strained relationship between Europe and China, however.

“After all, this is still the same China that the EU had to deal with for the past few years – China that is supporting Russia, China that is threatening Europe’s industrial power, and China that is imposing sanctions on European officials and civil society organisations,” the European Council on Foreign Relations’ Bachulska said. 

Eurasia Group’s Bremmer added that, in the end, Beijing’s efforts to restore relations with Europe aligns with its wider objective to weaken the West as a whole by undermining the bond between Europe an the U.S.

“Europeans will not be driven away from the U.S. by transactional policies embraced in Washington, but openly hostile, predatory ones,” he said. “If that trend continues, the transatlantic partners are heading towards a split.”