China Shock 2.0: This Time It's Europe, with Adam Tooze

Escalating trade tensions between the European Union and China stem from a fundamental shift in China’s industrial development, moving from subordinate supply chain integration to direct competition in high-value sectors like electric vehicles. Economic historian Adam Tooze characterizes this friction as a classic "double movement" of globalization, where the protection of domestic industrial bases—specifically Europe’s 12-million-job automotive sector—collides with international market forces. Unlike previous trade disputes, this "China shock 2.0" is compounded by geopolitical concerns regarding China’s alignment with Russia and the EU’s internal economic malaise. Rather than resorting to blanket protectionism or moralizing about "glut," Europe should pursue disaggregated, deal-based negotiations that leverage Chinese investment while enforcing clear, time-bound industrial policies. Ultimately, the challenge lies in managing a complex, regionally diverse political economy where both sides must reconcile their domestic developmental goals with global market realities.