Will Europe be flooded with Asian goods? The trade war between the United States and China may also shift to us.

"Considering that China does not respect global markets, I am increasing tariffs on China to 125 percent,"

wrote the American president, as reported by ČTK. His new trade barriers originally shook stock markets, increased the likelihood of a recession, and triggered a retaliatory response from China.

Donald Trump's strategy paid off, said Scott Bessent, the American Secretary of Finance, after the president's latest announcement.

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"It was his strategy all along and one could even say he pushed China into a corner,"

Bessent added.

The trade war between the two largest global economies is likely to escalate further with the recent steps taken by both the American and Chinese administration. Beijing has promised to "fight to the end". So far this means that it has begun to apply retaliatory tariffs of 84 percent on imports from the USA. In addition, China has imposed restrictions on more than a dozen American companies. These measures, among other things, ban the entry of senior executives of these companies into China or prohibit them from investing in the country. Washington also continues to indicate that it will not back down.

Fear of a flood of cheap goods

But this does not end the risk of worsening economic conditions that may affect many of us. The reason is that China will try to sell its goods elsewhere than in the United States. And we are among the first in line.

Prime Minister Petr Fiala warned before the shift of Chinese exports to Europe.

“It is certainly important to create a defense against the flood of cheap goods from China. We cannot allow Europe to become a space where China will dictate goods that it can no longer supply to the US market. This would certainly harm our businesses, so a sensible policy against China in this regard is in place,"

Fiala stated in a press release from the government.

China is already negotiating

Chinese Minister of Commerce Wang Wen-tchao said after a conversation with European Commissioner for Trade Maroš Šefčovič that his country has started negotiations with the European Union regarding electric vehicle prices.

"China wishes to deepen trade, investment, and industrial cooperation with the EU,"

The Chinese minister wrote according to the communication from the meeting.

The rapid steps of the Chinese administration suggest that Beijing had been preparing for the trade war well in advance. China will thus try to flood Europe with a glut of its cheap goods, such as electronics, clothing or toys.

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Cheap goods are going for a song

Just last year, according to the European Commission, approximately 4.6 billion cheap products from China crossed the borders of our continent. The Commission argues that Chinese e-shops benefit from dumping pricing, state subsidies and tax evasion, thereby damaging European companies that have to comply with stricter rules. Another problem is that a lot of goods do not meet EU regulations. There are much more harmful products appearing that endanger the health and safety of consumers.

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The Commission also warns of the risks associated with data protection, as Chinese e-shops often collect and process data about their customers in violation of European legislation. Therefore, it plans to introduce methods that will protect consumers from tracking and misuse of their data by Chinese e-shops. In addition, it is considering the introduction of an administrative fee for each package or the obligation of Chinese e-shops to register in the EU and comply with European regulations.

„Online shopping is becoming more and more popular and therefore we must increase our efforts to prevent products that do not conform to our safety regulations from entering the EU,"

Šefčovič added to this.

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Major investments

China can simultaneously press even more on such investments, such as the already mentioned electromobility or steel products. The automotive industry is now China's shop window, as brands like BYD and Chery Automobile prove. New investments often take place in the form of joint Chinese-European ventures, however, there is a risk that a large number of new cars, which will be significantly cheaper and in some cases possibly more faulty than the current offer, will come onto the market.

Americans consider China to be their greatest opponent. Therefore, they strive for its isolation, which is reflected in current trade barriers. This clash obviously also affects the rest of the world. Only the following months will show how much this will affect us directly.

Sources: ČTK, Government of the Czech Republic, European Commission