“The biggest challenge right now isn’t NATO, nor even Ukraine, as pressing as those issues are,” said Anthony Gardner, who served as U.S. ambassador to the European Union just prior to Donald Trump’s first term. “The primary issue is the diversion of Chinese exports previously bound for the U.S. that will now be redirected to Europe.”
Gardner warned about the potential fallout. “This displacement effect could be substantial and come at an already precarious moment when numerous industries are barely surviving. The consequences could be profound—potentially accelerating deindustrialization, fueling populist movements, and driving a turn toward the political right as people grasp for solutions, often extreme ones. This scenario is very real and could unfold rapidly.”
European governments are increasingly anxious about being caught in a geopolitical tug-of-war between the world’s superpowers, Washington and Beijing.
“We can’t afford to focus solely on the immediate impact of U.S. tariffs on EU goods,” said an anonymous EU diplomat, who spoke under the condition of anonymity to express how Trump’s tariff threats are causing turmoil in Brussels. “The ripple effects of shifting trade flows from U.S. tariffs on China could hit us hard—and much sooner than we’d like.”
Europe’s anxieties are hardly unfounded. A trade war with China would undoubtedly weigh on the EU, curtailing trade and growth at a time of economic fragility. Germany, the bloc’s largest economy and one driven heavily by exports, is already bracing for a second consecutive year of contraction.
Still, the level of impact on Europe may not be as dire as feared. According to the Kiel Institute for the World Economy, Europe is set to weather such a storm better than other regions. Their analysis suggests that Europe’s Gross Domestic Product would shrink by just 0.14 percent within the first year of a Trump trade war and by 0.2 percent in the long term. These figures pale in comparison to the more significant economic blows likely to be absorbed by the two principal players, the U.S. and China.
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