Tensions between Washington and Beijing surged on Wednesday after Chinese officials warned the United States to “stop threatening and blackmailing” in the wake of a new round of steep tariffs imposed by US President Donald Trump. The move has triggered fresh concern in Europe over global economic stability and the future of transatlantic trade.
This year, the Trump administration has placed a staggering 145% tariff on a wide range of Chinese goods. These new duties follow a 20% tariff over China’s alleged role in the fentanyl trade and an additional 125% levy aimed at what the US describes as unfair trade practices.
China’s foreign ministry responded strongly, with spokesperson Lin Jian stating: “There is no winner in a tariff war or a trade war. China does not want to fight, but it is not afraid to fight.” He added that the US must abandon “extreme pressure” and negotiate on the basis of mutual respect.
The European Union has not been directly targeted by the latest tariffs, but the deepening dispute has left European industries on edge. EU exporters fear ripple effects from a possible slowdown in global demand, especially in sectors like machinery, autos, and technology.
Economists across Europe are now voicing concern that the escalating US-China standoff could trigger a broader economic downturn. Many fear it could impact European markets, especially if global supply chains begin shifting away from China, creating price volatility and uncertainty.
While China reported a stronger-than-expected 5.4% GDP growth in the first quarter — driven in part by exporters rushing to ship goods before tariffs hit — analysts believe the worst is yet to come. European firms with exposure to Chinese markets are bracing for a slowdown in the second quarter.
Japanese automaker Honda announced plans to move some of its hybrid Civic production from Japan to the US, a decision interpreted by European analysts as a hedge against growing trade tensions. However, the company downplayed the move as part of a long-standing strategy to produce vehicles closer to demand.
South Korea’s finance minister also entered the conversation, indicating a desire to delay any reciprocal tariffs through talks with Washington. Similar voices within the EU are urging calm and calling for global coordination to avoid a full-scale economic confrontation.
The Trump administration, meanwhile, has offered temporary reprieves on certain tech products like smartphones and laptops, but chip stocks across Asia and Europe took a hit. Nvidia’s announcement of a projected $5.5 billion revenue loss, due to US licensing restrictions, sent shockwaves through semiconductor markets.
In a further move likely to alarm European tech leaders, Trump has now ordered a probe into critical minerals and rare-earth metals, hinting at future tariffs on smartphones and key electronics. With Europe’s tech industry also reliant on these components, the implications could be significant.
As the White House maintains its position that “the ball is in China’s court,” Europe watches closely — with its economic interests caught in the crossfire of a rapidly escalating global trade war.