Europe Watches Trump-Xi Summit With Growing Anxiety Over Trade and Industry

As US President Donald Trump and Chinese President Xi Jinping begin high-stakes talks in Beijing, European leaders are watching nervously from the sidelines — aware that whatever emerges from the summit could have major consequences for the continent’s economy and industry.

For Brussels, the summit is not simply about relations between Washington and Beijing. It is about whether Europe risks becoming collateral damage in an increasingly transactional rivalry between the world’s two dominant powers.

European officials fear the outcome could leave the EU squeezed between American strategic interests and Chinese industrial dominance, with little influence over decisions that may directly affect Europe’s economic future.

One of the biggest concerns centres on rare earth minerals, which are essential for electric vehicles, semiconductors, renewable energy systems and defence technology. China still dominates global supply chains for many of these critical materials, and European policymakers worry that any agreement between Trump and Xi could prioritise American access while leaving Europe vulnerable to shortages and export restrictions.

German and Japanese manufacturers are already feeling the pressure from tighter Chinese export controls on certain heavy rare earths. Analysts warn that Europe remains years away from building alternative supply chains capable of reducing dependence on China.

“China appears to be selectively licensing exports while preserving leverage over strategically sensitive supply chains,” said Ilya Epikhin of consulting firm Arthur D. Little.

Despite efforts under the EU’s Critical Raw Materials Act to boost domestic production and diversify sourcing, progress has been slow. A recent report by the EU Institute for Security Studies warned that Europe has set ambitious targets but still lacks the industrial and financial policies necessary to compete with China’s state-backed dominance.

Another major fear in Brussels is the possibility of a so-called “managed trade” deal between Washington and Beijing that sidelines Europe entirely.

European officials worry that if Trump negotiates concessions for the United States while easing pressure on Chinese exports, Europe could end up absorbing the fallout — particularly through a flood of low-cost Chinese industrial goods, batteries and electric vehicles entering EU markets.

Chinese EV manufacturers already enjoy significant cost advantages over European rivals. Vehicles such as the MG4 are often priced thousands of euros below comparable European-made electric cars, increasing pressure on EU automakers already struggling with high energy costs and slowing growth.

Experts say Europe has little confidence that Trump will consider EU interests during negotiations.

“The talks are becoming very bilateral,” said Jonas Parello-Plessner of the German Marshall Fund. “And one thing is certain: Trump will only speak for himself.”

At the same time, European leaders are equally concerned about the opposite scenario — a further escalation in US-China tensions.

A renewed trade war between the two economies could damage European industries through weaker global demand, supply chain disruptions and increased financial instability. Brussels is especially worried about sectors already exposed to fragile global trade flows, including manufacturing, automotive production and advanced technology.

Trade Commissioner Maroš Šefčovič recently warned that the EU was prepared to defend European industry aggressively if it faced unfair competition or market distortions.

Still, behind the tougher rhetoric lies a growing recognition that Europe’s economic future is increasingly shaped by decisions made in Washington and Beijing rather than Brussels.

The summit also highlights a broader geopolitical reality: while the European Union remains one of the world’s largest economic blocs, it lacks the unified strategic power and industrial autonomy of either the United States or China in critical sectors such as semiconductors, AI, energy supply chains and raw materials.

For Beijing, the meeting offers an opportunity to project stability and confidence at a time of global uncertainty. For Trump, it is a chance to demonstrate strength ahead of mounting economic and geopolitical challenges.

For Europe, however, the summit is largely about managing risk — and hoping that whatever agreement or confrontation emerges does not leave the continent economically exposed in a rivalry it increasingly cannot control.