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● Europe Surrenders, Swallowed by China

Europe’s Subtle Position and Economic Outlook Amid the US-China Trade War

Clash of Tariff Policies and Alliances

The US uses tariffs as a means to check China at the center of the global economy.
Both Biden and Trump imposed tariffs on Chinese goods amid the trade war, but there are significant differences in their detailed strategies.
Biden tried to limit the use of Chinese products in cooperation with allies, but he adjusted while being mindful of their concerns.
On the other hand, Trump responded with high-pressure tariffs after witnessing allies taking separate benefits behind the scenes.
This shows the strategic differences of the US in international finance and policy analysis, becoming the importance of alliances and the seeds of conflict.

China’s Strategy and Europe’s Response

China is employing a strategy of breaking cooperation by targeting vulnerable countries in Europe to circumvent US tariff policies.
Spain decided to attract a Chinese electric vehicle factory, showing a stance against US containment policies.
European countries face structural limitations in that they cannot fully rely on either the US or China.
As a result, Europe is in a contradictory situation where it is difficult to fully participate in the US stance amid the trade war.
This phenomenon has a significant impact on the economic outlook and international financial markets, suggesting the possibility of a prolonged trade war.

Challenges and Structural Changes in the European Economy

Europe has been overly dependent on the US security system and economic support, but it faces a situation where support is becoming difficult due to US fiscal soundness issues.
At the same time, internal issues such as aging and industrial transition are reorganizing the industrial structure, including agriculture, luxury goods, materials/components/machinery.
France and Germany are trying to overcome the situation based on high value-added industries, but some countries are expected to face difficulties without systematic reforms.
Policy analysis suggests the possibility of independent defense spending expansion and defense system cooperation in each European country along with these structural changes.
In particular, Europe’s attempt to strike a balance between the US and China is expected to be a major variable in the future global economy.

US-China Trade War and the Future of the Korean Economy

The trade war between the US and China has ripple effects not only on the US and China, but also on small and medium-sized countries such as Korea.
Korea has long relied on alliance relationships and overseas exports, but its weaknesses may be highlighted if there are changes in the allied support system.
In particular, as the internal industrial structure is revealed to be dependent on the elderly, there are concerns about the speed difference between industrial transition and technological innovation.
In this situation, instability factors in terms of international finance and the global economy are likely to have a negative impact on the Korean economic outlook.
Therefore, the strategic response of the US-China trade war and its impact on Europe and Korea is emerging as an important implication.

Summary

The US is pursuing a strong trade war strategy such as imposing tariffs to check China, while the Biden administration is showing a willingness to adjust by collecting opinions from allies.
China is breaking the US policy cooperation by targeting vulnerable countries in Europe, and some countries such as Spain are taking contrasting responses by strengthening economic relations with China.
As a result, it is difficult for Europe to strike a balance between the US and China, and it is placed in a challenging environment for structural changes and economic outlook.
In addition, the US fiscal soundness issues and industrial transition in each country, especially changes in the industrial structure due to aging, are expected to affect the global economy and international finance.
Korea is also at an important point where it needs to reorganize its future economic strategy in the midst of changes in the alliance system.
Key Words: Global Economy, International Finance, Trade War, Economic Outlook, Policy Analysis.

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