Is there an upside for China in the US-EU tariff row?



Cissy Zhou|South China Morning Post|

China could benefit from a US-Europe trade row over aircraft subsidies as

Beijing battles Washington and Brussels on fronts ranging from coronavirus to Hong Kong, according to analysts.

“Anything that distracts the attention of the US or EU from the trade issues they have with China and undermines their ability to work together cooperatively would accrue to China’s benefit,” said Stephen Olson, a former trade negotiator with the Office of the United States Trade Representative (USTR) and now a research fellow at the Hong Kong-based Hinrich Foundation.

On Tuesday, the USTR announced that it was considering putting tariffs on US$3.1 billion of European imports, including aircraft, cheese, ham, beer, and gin, from France, Germany, Spain, and Britain.

The US tariffs are likely to be imposed after July 26, when the public comment period ends, according to the USTR.

Analysts said they did not expect ties between the US and Europe to worsen, given that the two parties could be at odds on one issue but also team up to fight a different party if necessary.

“A major tariff escalation between the US and EU would certainly complicate their ability to work together, but it is sometimes possible to compartmentalize trade issues and fight in one area while cooperating in another,” Olsen said.

“The more politicized a trade dispute gets, however, the more difficult it is to compartmentalize.”

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