US-China friction could make EU dumping ground for cheap goods

Paris and Beijing are already at odds over the EU's tariffs on Chinese EVs and Beijing's levies on spirits

- bloomberg

China's widening trade surplus with the European Union (EU) is fueling fresh concerns that the 27-nation bloc risks becoming a dumping ground for cheap goods in the volatile tariff confrontation between Washington and Beijing.

As European officials step up vigilance to ward off a flood of Chinese goods facing higher barriers to get into the US, data already indicate that China's surplus with the EU reached a record $90 billion in the first four months of this year.

For now, most of the rerouting of Chinese goods is passing through Latin America and Southeast Asia. But the quantity of Chinese exports already flowing to Europe since the pandemic raises alarm bells that the influx may accelerate as America's higher import taxes take root.

"European and non-US markets are going to see an increase of Chinese shipments," said Maxime Darmet, a senior economist at Allianz Trade. "China will want to keep global market share at a high level so will try to increase share in other markets."