As U.S. President Donald Trump and Chinese President Xi Jinping begin their high-stakes summit in Beijing, the European Union finds itself in an uncomfortable position: watching from the periphery while fearing that any potential deal could come at Europe’s expense.
The summit, taking place on May 13, 2026, comes at a time of deep economic anxiety in Brussels and Berlin. European officials worry that a “transactional” deal between the two superpowers will leave the EU squeezed, treating European interests as secondary in the global struggle for trade, technology, and energy dominance.
The Critical Mineral Crisis: Rare Earths
The most immediate threat to European industrial survival is the supply of rare earth minerals. China currently dominates the global supply chain for these materials, which are essential for electric vehicles (EVs), semiconductors, and defense systems.
- The Fear: Brussels fears a bilateral arrangement where the U.S. secures priority access to Chinese rare earths, leaving Europe vulnerable to shortages and export restrictions.
- Current Impact: German and Japanese industries are already reporting significant disruptions due to Chinese export controls.
- Lagging Response: While the EU’s 2023 Critical Raw Materials Act set ambitious targets, a report from the EU Institute for Security Studies (EUISS) warns that Europe is lagging behind and has failed to make its strategic projects financially viable against China’s state-sponsored competition.
Trade Fallout and Industrial Survival
European experts, including Jonas Parello-Plessner of the German Marshall Fund, note that the talks are becoming “very bilateral,” with Trump speaking exclusively for American interests.
| Risk Factor | Potential Impact on Europe |
| Managed Trade Deal | U.S. and China cut a deal that redirects Chinese trade flows, potentially flooding Europe with overcapacity in EVs and batteries. |
| Tariff Escalation | If talks fail, a renewed trade war would disrupt global supply chains and hit European exports through financial volatility and weaker demand. |
| Price Gap | Chinese EVs are already 25% to 50% cheaper to produce. A compact SUV (MG4) costs €30,000 compared to €40,000 for a comparable Volkswagen ID.3. |
Defending the “Old Continent”
EU Trade Commissioner Maroš Šefčovič has signaled that the bloc is preparing for the worst, promising to “fight tooth and nail” for European jobs and companies. However, the rhetoric in Brussels contrasts with the reality on the ground: Europe’s economic future is increasingly being decided in rooms where it has no seat at the table.
After the U.S. Supreme Court struck down previous levies earlier this year, Trump has threatened new tariffs to protect American markets. Meanwhile, Beijing has warned U.S. business leaders of immediate retaliation for any hostile trade actions. For Europe, whether the summit ends in a “peaceful” deal or a trade war, the outcome appears to be a “lose-lose” situation that intensifies the pressure on the continent’s struggling industrial core.
