Europe Populists Avoid Open Attacks on China

For investors, the issue cuts across autos, industrials and the broader European growth outlook. Chinese electric-vehicle imports are still rising despite EU tariffs, and the prospect of more measures from the European Commission raises the odds of retaliation that could hit exporters, chip supply chains and metal and mineral inputs. The latest readings on the FXI China ETF show the pressure points: the fund fell to $33.19 on Oct. 2, below both its 50-day average of $35.13 and 200-day average of $36.07, with RSI at 31.9, a sign of weak momentum after a volatile year.

The political puzzle is that China should, on paper, be easy populist material. It combines the themes populists usually exploit — foreign competition, industrial decline, national sovereignty and distrust of global institutions — yet parties from Germany’s Alternative for Germany to Hungary’s Fidesz and France’s hard left have been notably cautious or even sympathetic.

Part of the answer is practical. China has poured money into European business networks and political circles, making some leaders reluctant to antagonize a source of investment and lobbying support. That helps explain why leaders who built careers on anti-communist or nationalist rhetoric have been willing to soften their tone toward Beijing.

But the larger reason is ideological. For many populists, China is less a villain than a model of strong state power, industrial policy and unapologetic nationalism. In that sense, Beijing’s challenge to the EU exposes a contradiction at the heart of populist politics: confronting China effectively requires coordinated action through Brussels, the very kind of collective European authority they usually reject.

That makes the next phase politically awkward. European Commission President Ursula von der Leyen has already called the China trade gap a “turning point,” and if Brussels escalates tariffs or other trade defenses, populists will have to choose between their anti-EU instincts and the domestic anger over deindustrialization that China helps fuel. The story now turns on whether Europe’s trade fight with Beijing forces its populists to pick a side.