The American trade war could divert Chinese products to EU markets: analysts

The commercial wars initiated by the president of the United States, Donald Trump, could interrupt the world trade of goods, which means that Europe could see their markets flooded with Chinese products, according to some analysts.

The European Union may have expressed some relief for Trump's decision on Wednesday to suspend its threat of slapping customs duties over foreign goods entering the United States.

But that 90 -day moratorium does not apply to China American imports, which leaves Europe with the question of where the Asian giant will download the actions that previously sold to the US market.

The EU of 27 nations is among dozens of economies to which a baseline tariff rate of 10 percent is now applied.

On the contrary, Chinese exports to the United States face a tax of 145 percent, which puts many of these products out of reach of less rich Americans.

Therefore, China could try to sell these goods in Europe, even if that means reducing prices.

That, some analysts say, would undermine European industries that are already fighting with Chinese competition.

“This change could lead to new commercial routes and more complex international supply chains,” said Daniela Sabin Hathorn, a senior market analyst at Capital.com.

“Companies can start changing Chinese products … to avoid US tariffs.”

The French president, Emmanuel Macron, has already pointed out the risk.

Thursday said the EU had to take into account the indirect consequences of Trump's decisions.

“Chinese tariffs are huge … There is a potential risk that some of these products are diverted, which will clearly affect our economies and unbalance certain sectors and markets,” he warned.

On Friday, he urged the EU to protect from “third -country flows.”

However, the Tax on Chinese products “would increase competitive pressure in the European industry, particularly in sectors where margins are already very tight,” said Anais Vie-Gillis, a geographer specialized in industrial affairs.

The European Steel Sector “that is already” weakened “even more, he said.

She said that European manufacturers of aluminum and solar panels, where China already dominates the world market, would also be exposed.

The Ministry of Industry and Energy of France said that the chemicals of the AFP and the vehicle pieces would also be affected.

Aurelien Saussay, professor at the London School of Economics, suggested, however, that the “net effect will not necessarily be as massive as one could imagine.”

Comparatively, he said, the direct commercial war of the Trump administration in China could “offer the EU an advantage over China to export to the United States.”

“Therefore, there are also compensatory effects.”

If there were a significant influx of Chinese products, Europe could “react when introducing protectionist policies,” said Saussay.

“That is why we have spent the last 80 years avoiding this type of protectionist offensive,” said the economist.

“We quickly got into the logic of retaliation, which later becomes very difficult to get you.”

The head of the European Commission, Ursula Von Red Leyen, reacted on Tuesday by emphasizing “China's critical role in addressing the possible commercial diversion caused by tariffs, especially in sectors already affected by global overcapacity.”

The leaders of the industry and the bosses of the company, meanwhile, have urged Europe to remain competitive, focusing especially on the “policies on the offer” and “regulatory simplification,” said Alexandre Saubot, head of the lobby of France Industrie, April 3.

The EU standards are also useful because “they protect the European market to some extent from lower quality goods,” said I va-Gillis.

For example, the European market imposes “very high standards” for cosmetics “, according to Emmanuel Guichard of the French Federation of the Beauty Industry (FEBEA).

“Quality regulation and standards means that there is not such a great risk that Chinese products flood the market (cosmetics),” he said.