De-Risking Revisited: Europe, the US and China

Three weeks ago, we published a reflection on Europe's "de-risking" strategy towards China. We questioned whether this "de-risking" approach vis-à-vis China genuinely served European interests. Today, as events unfold across the Atlantic, our concern deepens.

The latest developments in Washington alarm any observer of global trade. President Trump has embraced tariff policies so erratic that even America's own business community is paralyzed by uncertainty. According to a CNN report, President Trump suggested tariffs as high as 50% could become permanent, with existing tariffs already punishing importers, exporters, small businesses, and ultimately consumers. Trade with China has slowed ("to effectively zero," according to Trump), warehouses are being emptied, and consumer confidence has plunged.

The article also notes that the Federal Reserve's Beige Book recently recorded a new milestone: the word "uncertainty" appeared 81 times in a single report. This is not just noise; it is a fundamental shift. The U.S., long perceived as a champion of stable, rules-based trade, is rapidly morphing into a highly unpredictable partner.

In contrast, China's trading posture — while often difficult, strategic, and protective of its own interests — remains relatively stable and forward-looking. China plays hard, but it plays predictably.

Europe must ask itself an uncomfortable but necessary question: If "de-risking" is truly about reducing exposure to political and economic unpredictability, why is the focus so squarely on China — and not on an increasingly erratic Washington?

A sober assessment suggests that Europe's true "de-risking" imperative lies in balancing its relationships carefully, not severing ties with its largest trade partner based on ideological or geopolitical pressures.

The lesson is clear: predictability is the ultimate form of economic security. In a world where American policy can swing from free trade to punitive tariffs within a single election cycle, Europe's economic resilience may well depend on pragmatic engagement with a China that, however challenging, still offers a far steadier hand.

It's time to revisit "de-risking" with our eyes open to the full spectrum of global risk — and opportunity.