EU sanctions for a conflict around Taiwan: What’s Europe’s leverage against China? 

As the United States shifts its focus toward Southeast Asia and China, Europe faces a critical moment in evaluating its own approach to a potential conflict over Taiwan. Perhaps counterintuitively, the EU likely holds more economic leverage over China than the bloc typically assumes. This is because Beijing would probably factor in retaliatory sanctions from the US ahead of an aggression against the island. However, Chinese leaders likely believe that they could deter the EU from going down the sanctions road. 

This means that EU sanctions could prove game-changing to prevent a Chinese aggression against Taiwan. Clear threats of sanctions from Europe would signal to Beijing that the costs of an invasion are even higher than those that Chinese leaders have already priced in. What’s more, EU policymakers have an ace up their sleeve to alter China’s calculus around Taiwan – leveraging the access of Chinese firms to the wide EU market, for instance through import bans on Chinese non-critical, consumer goods.  

A recent ECFR policy brief, “Hard, fast, and where it hurts: Lessons from Ukraine-related sanctions for a Taiwan conflict scenario“, explores specific economic statecraft measures that the EU could take against China, identifying their potential impact and the trade-offs that the EU and its member states would face. The report also outlines how the EU could tackle sanctions evasion, boost collaboration with the private sector and co-operate with like-minded allies while preserving its own interests. 

This lively, thought-provoking discussion dived deep into Europe’s economic leverage against China, US preparations for such a scenario and how transatlantic collaboration would be key to alter Beijing’s calculus in the run-up to a Chinese invasion of Taiwan.