As trade tensions with China intensify, European Union officials are quietly preparing for a potential trade war while simultaneously seeking diplomatic engagement with Beijing. In Brussels, there is a determined effort to prevent the bloc’s manufacturing heartlands from being deindustrialised by what is being termed the “China Shock 2.0.”

Some European industries are already losing jobs, prompting the EU to implement resilience-building and de-risking strategies that include deterrents aimed at acquiring leverage and credible retaliatory tools. These measures would enable the EU to respond if China employs trade coercion.

Analysts remain divided: some believe a trade war is already underway, others see it as imminent, while some advocate avoiding it altogether. Amid this uncertainty, a key question arises: could Europe actually win such a conflict?

Few in Brussels share the confidence expressed by US President Donald Trump in 2018, who famously said, “trade wars are good, and easy to win.” During a parliamentary hearing in July 2026, the EU’s top trade enforcer Denis Redonnet emphasized that engaging with Beijing aims “to avoid sleepwalking at two levels,” highlighting the need for vigilance and strategic planning.

The evolving situation underscores the EU’s steely resolve to safeguard its economic interests in Asia amid complex geopolitical challenges.

Sources