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China-EU relations
EconomyChina Economy

US trade negotiators may ‘smell blood in the water’ if China makes concessions in EU talks

  • As EU-China investment treaty talks reach a crucial point, analysts say Trump White House will be watching for any concessions made
  • United States and European Union share same objectives on China, experts say, but doubtful whether coordinated approach is imminent

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The Trump White House will be closely watching how EU-China investment treaty talks unfold. Illustration: Perry Tse
Robert DelaneyandJodi Xu Klein

This is the fourth in a series of five articles analysing the potential for an EU-China investment treaty, looking at negotiating positions, sticking points and geopolitical tensions. You can read part one in the series here, part two here, part three here and part five here.

When top European Union (EU) officials face off with their Chinese counterparts next week to try and hammer out an investment treaty, figures in Washington, where US trade officials spent two presidential terms trying to do the same, will be watching closely.
No one in the United States will feel the pressure more than President Donald Trump, who has staked much of his reputation on creating a more balanced trade and investment relationship with China. Any concessions the EU might extract from Beijing would likely intensify the US leader’s hard-driving approach to a bilateral trade war with China that has dragged on for two years, analysts said.
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“If the US sees China making serious reform concessions to the EU, it might smell blood in the water and push even harder on reaching an agreement with Beijing,” said Eurasia Group’s China analyst Kelsey Broderick. “It would likely incentivise US actors to push China hard on phase two [trade deal] commitments.”

01:34
Trump ‘pleaded’ for China to help him get re-elected, writes former US adviser Bolton in new book

Efforts to reach a US-China bilateral investment treaty (BIT) stretched over more than two dozen negotiating rounds, throughout Barack Obama’s eight years in the White House. The BIT talks fizzled out once Trump became president, although the basic objectives stayed intact.

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