The recent commercial conflict between the United States and China could have major consequences for Europe. After briefly imposing tariff threats, President Trump announced a 90-day pause on foreign product surcharges, yet maintained stiff tariffs against China.

Chinese products now face 145% tariffs when entering the US market, a prohibitive level for many goods. This has raised concerns across Europe about where Chinese products originally destined for American markets will now be sold.

European officials worry China may redirect its excess merchandise to European markets, potentially at discounted prices. This could further threaten European industrial sectors already struggling against Chinese competition.

"This shift could create new trade routes and a more complex supply chain," says Daniela Sabin Hathorn, an analyst at Capital.com. She believes companies might start rerouting Chinese goods to bypass US tariffs.

French President Emmanuel Macron has warned about the indirect consequences of Trump's decisions. "This will create risks of potential diversion of some products that will very clearly impact our economies and the balance of certain sectors and our markets," he stated.

Australia has rejected China's proposal to form an alliance against US tariffs. Deputy Prime Minister Richard Marles stated Australia would not be "holding hands with China" in trade disputes, choosing instead to diversify trade relationships with partners like the EU, India, and Britain.

The sectors most likely to be affected include:

• Steel and aluminum industries
• Solar panels where China dominates global production
• Basic chemicals
• Automotive parts

In response to potential Chinese product influx, Europe might implement its own protectionist policies. Economist Aurélien Saussay warns this could lead to a retaliatory cycle that would be difficult to exit.

European Commission President Ursula von der Leyen has emphasized China's "essential role" in preventing this potential trade diversion. Meanwhile, industry leaders are calling for Europe to improve competitiveness through regulatory simplification while maintaining quality standards that partially protect European markets.