When Trade Wars Spill Over: Do Trump’s Tariffs on China Affect the European Union?

Sammanfattning

Renewed geopolitical tensions and rising protectionism have once again placed tariffs at the center of international trade policy. Following Donald Trump’s return to the White House in 2025, substantially higher tariffs were reimposed on Chinese imports, raising concerns about global spillover effects beyond bilateral U.S.-China trade. In particular, European policymakers have expressed concern that displaced Chinese exports may be redirected toward the European Union, potentially harming European industries. This thesis examines whether U.S. tariffs imposed on China during Trump’s second presidency have redirected Chinese exports away from the United States and towards the European Union. Using monthly trade data on Chinese exports from January 2022 to October 2025, the analysis applies a gravity model framework and extends it to capture dynamic adjustment effects over time. A broad set of Chinese trading partners is included to assess whether export patterns to the U.S. and the EU deviate from global trends following the tariff increases. The results show a significant decline in Chinese exports to the United States after the imposition of tariffs. However, no empirical evidence is found in favor of a change in EU imports from China following the imposition of U.S. tariffs on China. These findings suggest that, at least in the short run, renewed U.S. tariffs primarily reduce bilateral U.S.-China. It cannot be ruled out that there was no redirection of Chinese exports from the U.S. towards the EU. The thesis contributes preliminary findings to the literature on trade wars and global spillovers and offers timely insights for policymakers concerned about indirect effects of trade policy in an increasingly uncertain international trade environment.