THE US economic war against China has been going on for some time. It began under Trump and was continued zealously under Biden.

It ranges from import tariffs on Chinese machinery, electronics, steel, aluminium and auto parts, among others, to restrictions on technology transfers of semiconductors, artificial intelligence, telecommunications and 5G networks, space and satellite technology, robotics and advanced manufacturing technology.

Several Chinese companies are on blacklists, preventing US companies from trading with them. This also applies to investments in certain Chinese sectors such as technology, telecom and infrastructure.

Finally, there is the ban or threat of a ban on Chinese apps such as TikTok and WeChat.

In the run-up to the presidential election, Biden is now doubling down on these attacks. On May 14, he announced a whole series of new import tariffs.

Most notable is the quadrupling of import tariffs on imported Chinese electric vehicles (EVs): from 27.5 to a whopping 102.5 per cent. On Chinese solar cells, the import tax doubles from 25 per cent to 50 per cent.

There are also new tariffs or tariff increases on Chinese steel and aluminium goods, and on medical equipment.

In the near future, there will be further tariff increases for lithium-ion batteries — used, among other things, in EVs — and Chinese semiconductors. There will also likely be more tariffs in the shipbuilding, maritime and logistics sectors.

Finally, the Biden administration has put pressure on neighbouring Mexico to ban China from indirectly selling its metal products to the US from there.

According to the US, China is facing an overcapacity and the global market is being flooded with cheap Chinese EVs, solar panels and other green energy products.

Washington says China can produce cheaper because of government subsidies, and that creates unfair competition and hurts US businesses and workers.

This reasoning is also followed to a certain extent by the European Commission and is rehashed by our mainstream media.

But the allegations are baseless and hypocritical. Both the US and Europe subsidise their green energy production. According to Goldman Sachs, subsidies in the US under the Inflation Reduction Act (IRA) even amount to more than $1,200 billion — that is almost a fifth of the annual government budget.

Nor is there any question of overcapacity and flooding the global market. Only 16 per cent of electric cars made in China are exported.

On a global scale, there is undercapacity rather than overcapacity. If we want to achieve the climate goals, much more and faster production will have to be done worldwide than is currently the case. Without China’s production capacity, the necessary and urgent energy transition would be even further delayed.

There are three reasons why China is doing so well in green energy. The country started much earlier than the rest of the world, it has an enormous territory and — perhaps most importantly — it has a very effective economic policy.

In the US, on the other hand, the results of the subsidy policy are downright substandard. After two years of generous subsidies, barely seven new EV charging stations have been installed in the country, providing a total of 38 spots for drivers.

For the three above-mentioned reasons, China has managed to build a large lead, making its competitiveness overwhelming. This is neither the result of cheap labour nor of improper subsidies.

Due to the existing import tariffs, the US car industry is hardly affected by Chinese plug-in cars: barely 2 per cent of EV imports come from China. Biden’s new import tariffs therefore primarily have political motives.

We are in the middle of the election campaign and with these measures Biden wants to send a signal to voters in the badly damaged Rust Belt that he is doing everything he can to protect US jobs. He is being egged on by his opponent, Trump. The latter accused Biden of acting too slowly and not going far enough.

Neither candidate wants to appear weak on China, setting off a race between two presidential rivals who want to show which of them — in the light of China's increasing manufacturing power — is the most aggressive protector of US jobs.

But it goes beyond election fever. There is a bipartisan consensus about the aggressive approach toward China. Both parties and a large part of the economic elite fear that if things continue the way they are, the US will lose its supremacy, both economically and technologically, something they want to avoid at all costs.

In a speech, Jake Sullivan, the US national security adviser, said his administration wants to hamper China’s capabilities in “fundamental technologies” such as artificial intelligence, biotechnology and clean energy, to enable the US to maintain the greatest possible lead on coping with climate change. The Republican Party fully agrees.

Washington is trying to drag Western allies into this economic war. But that is not a matter of course. Western economies and Chinese economies are closely intertwined and in many areas the West needs China more than the other way around. For example, Europe cannot possibly achieve its climate goals without China.

The costs of a trade war may be very high. Trade tariffs do not lead to more production, but they do lead to higher prices for consumers and will therefore put a brake on achieving the climate goals.

“This is horrible news for American consumers and a major setback for clean energy. Tariffs are a direct, regressive tax on Americans and this tax increase will hit every family,” wrote the governor of the state of Colorado, Jared Polis on X.

Without cheap exports and production from China, there will be significant inflationary pressures in industrialised countries, especially in light of the transition to cleaner technologies.

A trade war with China will also inevitably lead to retaliatory measures. Apart from potentially large financial losses due to decreased exports to China, the country also has essential goods on which we are highly dependent.

The whole question is whether Europe will be drawn into this new Cold War logic and thus shoot itself in its own foot.

Economically, Europe is more dependent on China than the US. For example, China is Germany’s largest trading partner and a crucial market for German industrial companies.

The centre of gravity of the world economy is increasingly shifting to Asia, with China as a locomotive. It would be very unwise for Europe to miss out on this growth momentum.

Europe is at an important crossroads in history. Will it allow itself to be dragged into a destructive trade war initiated by the US, or will it succeed in charting its own autonomous course and building a constructive economic relationship with China, based on mutual benefit?

The stakes are high.