Keir Starmer of Britain is the most recent Western leader to relax trade relations with China, a move that analysts believe is motivated by US tariff pressure and concerns about Donald Trump’s erratic policy agenda. Britain’s Keir Starmer is the latest Western leader to thaw trade ties with China in a shift analysts say is driven by US tariff pressure and unease over Donald Trump’s volatile policy playbook.
Following proposals from the leaders of Canada, Ireland, France, and Finland, the prime minister is visiting Beijing this week to encourage “pragmatic” cooperation.
For the first time in years, the majority were travelling to revitalise their relationship with the second-largest economy in the world.
The director of the European Centre for International Political Economy, Hosuk Lee-Makiyama, told AFP that there is a “veritable race among European heads of government to meet with (Chinese President) Xi Jinping.”
According to him, this is “driven by internal rivalry to secure investments and market access before the China-US summits in February and April.”
Not only does China seem more appealing these days, but India and the European Union announced a massive trade agreement on Tuesday that has been in the works for 20 years. This is an attempt to open up new markets in the face of a tense status quo.
On Thursday, Vietnam and the EU also pledged to work together more closely on trade, technology, and security.
The world’s most export-dependent economies are located in Europe, and India and other developing markets like South America are too small to support them, according to Lee-Makiyama.
Therefore, despite worries about Beijing’s human rights record and allegations of economic coercion, they are forced to turn to Beijing.
According to Lee-Makiyama, “Either the United States or China generates half of economic growth,” and “the United States is hardly opening up.” The “
According to William Alan Reinsch of the Centre for Strategic and International Studies in Washington, Trump’s erratic tariff assault indicates that “the United States is no longer a reliable trading partner.”
Twenty years after talks started, Reinsch told AFP, “You can argue that, ironically, Trump’s policies have pushed it across the finish line” for the new EU-India Free Trade Agreement.
Starmer told Xi on Thursday that strengthening the two nations’ relationship was “vital”, and the Chinese leader emphasised the importance of doing so in the face of geopolitical challenges.
Ten years ago, London and Beijing experienced what they called a “Golden Era”, but after Beijing imposed a national security law on Hong Kong in 2020, relations began to deteriorate.
However, Starmer’s centre-left government is eager to accelerate UK economic growth, and China continues to be Britain’s third-largest trading partner.
The European Union is concerned about the current trade imbalance, with a staggering deficit of more than $350 billion to Brussels’ detriment, even though it also wants closer ties with China.
While Emmanuel Macron of France criticised the trade imbalance during a visit to Beijing in December, Irish Prime Minister Michael Martin called for “open trade” during his discussions with Xi in early January.
In addition, China and India are looking for ways to deal with Trump’s tariffs, which are intended to increase US manufacturing and “make America great again”.
Chinese Vice Premier He Lifeng stated at this month’s World Economic Forum, “The world cannot return to the law of the jungle where the strong prey on the weak, and a select few countries should not have privileges based on self-interest.”
Trump has occasionally responded with additional tariff threats, such as a new 100% tax on all Canadian goods in the event that the US neighbour strikes a trade agreement with China.
In Beijing this month, Canadian Prime Minister Mark Carney celebrated a “preliminary but landmark trade agreement” to lower tariffs and a “new strategic partnership” with China.
China, which was previously Canada’s biggest market for canola seed, is anticipated to lower tariffs on the goods from the current 84% to about 15% as part of the agreement.
Canada will import 49,000 electric cars from China at a reduced tariff rate in exchange.
According to Vina Nadjibulla, vice-president of research and strategy at APF Canada, Carney’s visit “signalled a fundamentally new approach to how Ottawa intends to navigate a more fragmented, contested, and uncertain world.”
However, she cautioned that it might be misunderstood as “a softening of Canada’s assessment of the national and economic security challenges China poses.”
Reinsch at the CSIS noted that the most recent agreements were “surprisingly traditional” and projected that they would ultimately put the US at a disadvantage.
He stated that “exactly what the world has been doing for the past 75 years” is negotiating lower tariffs and non-tariff barriers.
“The United States is the anomaly.”
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