China benefits from the US-Europe trade war

Faced with the prospect of having to retaliate against US tariffs with certain economic damage, experts say Europe and other Washington partners are likely to seek more stable trade opportunities in the Chinese market.

US President Donald Trump threatened to impose a 200% tariff on wine, champagne and other alcoholic beverages imported from European countries if the EU does not stop imposing reciprocal tariffs on $28 billion worth of US goods from April 2025 - Photo: AFP

"The one who is standing on the sidelines laughing or watching from the other side is China," Kaja Kallas, the European Union's high representative for foreign policy, said in an interview with Bloomberg Television on March 13 that Beijing will benefit from the EU-US trade war.

Consumers on both sides suffer first.

Earlier the same day, US President Donald Trump threatened to impose a 200% tax on wine, champagne and other alcoholic beverages imported from European countries if the EU did not stop imposing reciprocal taxes on $28 billion worth of US goods from April 2025.

Speaking about the retaliatory move against Washington's tariffs, European Commission President Ursula von der Leyen said the EU had "no choice" in choosing these measures because they would "threaten jobs" and "cause prices to rise in both Europe and the US".

European consumers will soon face rising prices on a range of goods, from cars to jeans, as industries such as steel, retail and agriculture struggle with rising costs amid tit-for-tat tariffs between the US and Europe, according to CNBC.

Susannah Streeter, director of currencies and markets at Hargreaves Lansdown, said the EU tariffs would push up costs for “a range of manufacturers, particularly car manufacturers, and food producers.” The scale of the impact on consumers would be profound, with Streeter citing the potential for rising costs on everyday items like a can of Coke or a tin of beans.

Sharing Streeter’s view, Stuart Katz, chief investment officer at Robertson Stephens Asset Management, also predicted that prices would start to rise when the EU’s retaliatory tariffs take effect on April 1. Katz said consumers would soon feel the consequences of the tariffs, as businesses raised prices to maintain profit margins.

For consumers in the US, tariffs of up to 200% on alcoholic beverages from Europe will mean they will have to pay two to three times the previous price for a bottle of French wine.

"I don't think customers are willing to pay two or three times more for their favorite wine or champagne," CEO Ronnie Sanders of Vine Street Imports (New Jersey, USA) told AP.

Meanwhile, Jeff Zacharia, president of Zachys Wines in Port Chester, New York, said 80 percent of the wine he sells is imported from Europe. Mr. Zacharia added that the distribution system of wine importers in the US depends largely on European wine and there will not be enough American supply to make up for the loss of wine imports due to high tariffs.

According to figures from the International Trade Centre, the US is an important export market for European wine producers. In 2024, the US imported 13.1 billion euros (more than 14.2 billion USD) of beverages, spirits and vinegars from the EU.

Source: EUROSTAT - Content: NGHI VU - Graphics: T.DAT

China benefits

In response to Washington's unilateral tariff moves, former US diplomat Wendy Cutler said this could prompt US allies to build closer ties with China or India.

The Diplomat magazine also commented that the US-EU relationship could falter under the Trump administration, and this is a golden opportunity for China to mend relations with the bloc, as both are victims of US tariffs.

Already locked in a trade war with the US, Beijing could avoid this upheaval spreading by being more flexible in negotiations with the EU, giving in to some demands or some tariffs to build political trust.

Regarding opportunities to leverage China's influence, Ms. Cutler pointed out that Beijing is courting many markets around the world, as well as emphasizing that China recently upgraded its free trade agreement with the ASEAN region.

"They (China) are making overtures to many other countries. And when our partners can't rely on us, they will find other countries, including China, more attractive," Ms. Cutler commented.

Sharing the same view with Ms. Cutler, many experts also said that Europe is eyeing many other markets as tensions with the US escalate.

"The reality is, given the vastness of the world, Europe will have to look for alternative markets to the US market, while China can step in to help," David Roche, strategist at Quantum Strategy, told CNBC.

Tesla also warns of tariff consequences

According to Reuters on March 13, billionaire Elon Musk's Tesla Company warned that it and other major US exporters would suffer from retaliatory tariffs from other countries for Mr. Trump's tariffs.

The letter, dated March 11 and addressed to the Office of the US Trade Representative, reflects the concerns of many US businesses about Mr. Trump’s tariff war, but it is worth noting that Tesla is owned by billionaire Musk, a close ally of the current US President.

In the letter, Tesla said US exporters are being disproportionately impacted as countries respond to Washington's trade moves.

"For example, previous US trade actions have resulted in immediate responses from targeted countries, including increased tariffs on electric vehicles imported into those countries," Reuters quoted the letter as saying.

Tesla also warned that even with a heavily localized supply chain, “some parts and components remain difficult or impossible to source domestically in the United States.”

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Source: https://tuoitre.vn/trung-quoc-huong-loi-tu-thuong-chien-my-au-2025031508015049.htm