'We need to realign our trade'

5 min read

This interview with GMF's Visiting Distinguished Fellow Gunnar Wiegand by Amelie Richter originally appeared in Table China. 

Should Donald Trump return to the White House this November, the West's trade conflicts with the People's Republic will increase, warns former EU diplomat Gunnar Wiegand. He says the EU must prevent deindustrialization caused by cheap Chinese imports.

Let's take a look into the future: In January 2025, just under nine months from now, who do you think will be in the White House? And who will lead the EU Commission?

No think tank has the capacity to tell fortunes. We look at the democratic processes. We all know that the situation in the USA is open and that one or another candidate selection can be made by the American people. As far as the final selection is concerned, we have already seen several times that presidents other than those who received the majority of votes cast were able to prevail in the electoral system. I think we have to be realistic. Not only here in Brussels, but in all parts of the world, we have to be prepared for the possibility , that the challenger and former president could become US president again. That would of course have certain effects on policy in Washington, both towards Europe and towards China and Russia.

And who do you think will become President of the EU Commission? 

This is even more difficult. In contrast to the US elections, there is even less predictability here because the top candidates are not all candidates for the EU Parliament and the proposal is first made by the European Council, which then has to be confirmed by a majority in the European Parliament. But I think there is a high probability that the candidate of the strongest parliamentary group will be appointed the President of the European Commission. We can assume that there are relatively good chances for the current incumbent to continue to lead the Commission.

In the triangle of the United States, China and the EU – what will be the main issues in the next few years?

The most important question that all three will face is: How do we trade? This was the main sticking point between the Trump administration and China. The measures that were taken at that time, namely the unilateral imposition of significant tariffs not only against China but also against other trading partners such as Europe, which are currently suspended. The topic gains additional importance because we have an ever-growing capacity for overproduction in China, not only for steel and aluminum, but especially for solar systems, electric cars and wind turbines. This is largely achieved through subsidies and this structural overproduction has to be sold somewhere. We certainly have to come up with new policy approaches here, both in the producing country and in the sales markets, in order to deal with this in such a way that deindustrialization does not occur in our countries.

And apart from trade?

The question of Taiwan. How important is the goal of reunification in policy-making in Beijing? And how is the reaction to this in Europe and the USA? If the red lines are adhered to, i.e. no means of violence are used or threatened, then this will also be respected in Washington and Brussels. There must be a consensual process between the leadership in Taiwan and the leadership in China, the results of which must be democratically legitimized. The issues of economic security in cutting-edge technologies and possible licensing of exports and foreign investments also remain important.

But the ever closer connection between China and Russia is becoming increasingly important for Europe's relationship with China. Because Russia's war against Ukraine continues and is becoming more intense. Whether intentionally or not, China is now the most important economic, financial and technological pillar of Russia's war economy. This is increasingly becoming a problem for European security.

What would a President Trump mean for Taiwan?

I think President Trump would not question the strategic ambiguity of the US position in supporting Taiwan. He hasn't done that during his first presidency or during the election campaign. Therefore, one should not jump to conclusions about Taiwan, even if Trump had, let's say, taken a much more robust stance on trade policy towards Taiwan.

You have not been part of the European External Action Service (EEAS) for almost six months. How do you now see the work from the outside regarding China?

Overall, the EU is pursuing a holistic course that is sometimes complex and slower than intended, but that overall has developed significantly on a basis of realism. Let's take China, with the ambitions it has and the capabilities it is building. Since 2019, all EU member states have been able to rally behind the approach, to see China simultaneously as a partner, as a competitor and as a systemic rival. We see that a number of regulations and directives have since been adopted to better leverage Europe's normative and economic power in the absence of bilateral agreements with China. I would like to point out that all of these legislative proposals always required cooperation between the Council and Parliament. That's why it took time.

What progress has been made, specifically?

There has also been a lot more realism in the Member States themselves. Look at how many Confucius Institutes there are in our universities today and how many there were a few years ago. Or how many member states are still taking part in the Belt and Road Initiative. The 17+1 process has also come to a standstill. There has also been a rethink at the national level, and joint EU action has become much more important. The most important task, where much more common ground must now be found and decisions must be made clearly, is in the area of structural overproduction in China and how to deal with it. There is still a lot to do.

Gunnar Wiegand is a Visiting Distinguished Fellow at the Indo-Pacific Program of the German Marshall Fund of the United States (GMF). Wiegand was Head of the Asia Division of the European External Action Service (EEAS) from January 2016 to August 2023. Previously, he was Deputy Head of the Europe and Central Asia Division and Director of the Russia, Eastern Partnership, Central Asia and OSCE Division.