More constructive engagement urged

Chamber: Sino-U.S. tariff detente good, but more long-term stability needed

With China and the United States agreeing to de-escalate trade tensions, European companies are urging both sides to resolve differences through constructive engagement and refrain from actions that could disrupt global trade and investment activities, said the European Union Chamber of Commerce in China.

While the chamber is encouraged by the tariff adjustment measures announced by China and the U.S. on Monday, uncertainty remains, said Jens Eskelund, president of the Beijing-based chamber.

Eskelund noted that this is partly because certain tariffs have only been suspended for 90 days, and partly because of the erratic nature in which these tariffs were implemented in the first place. Businesses need predictability to maintain normal operations and make investment decisions.

According to a survey released by the EUCCC earlier this month, the unilateral U.S. tariff policy has opened the door for European companies in China to expand their market share at the expense of their U.S. competitors.

The study found that around 13 percent of respondents reported gaining more business from Chinese customers, while another 6 percent said they are attracting increased business from other foreign firms operating in China.

Some 57 percent of respondents stated that they have been unaffected by U.S. tariffs on imports from China. This can be attributed to the "in China, for China "approach that many chamber members have adopted.

One of these companies is Bosch Group. The German industrial conglomerate said that the impact of tariffs on its business in China has been relatively limited.

Xu Daquan, president of Bosch China, said most of the company's products are locally sourced and manufactured for customers in the Chinese market.

"There are indeed some transactions between Bosch China and Bosch facilities in the U.S. — we import certain components produced by Bosch plants in the U.S., amounting to roughly 1 billion yuan ($139 million), and we also export some products to the U.S., also around 1 billion yuan," said Xu.

Therefore, about 2 billion yuan worth of business is affected, which represents a small proportion of Bosch's total sales revenue of 142.7 billion yuan in China in 2024, reflecting an annual growth rate of 2.7 percent, he added, stressing that as a multinational corporation with a global business footprint, Bosch can quickly make strategic adjustments when needed.

Ying Pinguang, dean of Shanghai University of International Business and Economics' School of Global Governance, said that if the U.S. continues to impose high tariffs on Chinese goods, many U.S. products — from chemicals and industrial goods to wine and agricultural products — could be priced out of the Chinese market as a result.

Voicing a similar view, Su Qingyi, director of the department of international trade at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said such a scenario would not only hurt U.S. exporters, but also limit consumer choice in China, potentially prompting Chinese companies and consumers to turn more decisively toward alternative suppliers from Europe and other regions.

Su said high tariffs could accelerate the decoupling trend and undermine the global competitiveness of U.S. companies over the long run.

Eager to capture more market share in China, Air Liquide SA, a French industrial and medical gas provider, put a hydrogen energy facility into operation in Shanghai in late March, supporting growing mobility and industrial needs in the Yangtze River Delta region.

The Chinese market is poised for growth, driven by ongoing urbanization, green energy transition, environmental protection efforts and the development of high-end manufacturing, said Rui Coelho, CEO of Air Liquide China.

China's resilient supply chains and advanced infrastructure further support efficient production and logistics, he said.

China's foreign trade with the European Union grew by 1.1 percent to 1.78 trillion yuan in the first four months, while China-U.S. trade declined 2.1 percent year-on-year to 1.44 trillion yuan, said the General Administration of Customs.