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In the political game of trade relations, the EU may be played by both sides, suggests Greg Gibbs, Analyst at Amplifying Global FX Capital.  

Key Quotes

“China is looking to tighten its trading relations with the EU, it appears, to bolster or form a front against US trade protectionism.”

“China is hosting EU leaders Donald Tusk, president of the European Council, and European Commission president Jean-Claude Juncker at a   summit in Beijing on 16-17 July.   Before then, Chinese Premier Li is to meet German Chancellor Merkel in Berlin.”

“These meetings follow meetings between Chinese officials, led by Premier Li, and Easter European country officials last weekend where China was offering increased investment.”

“China appears to be lifting its engagement with the EU to counter the economic threats posed by US trade and investment policies.”

“The EU may try to delicately balance relations with the US and China to attempt to maintain good trading relations with both.   The US and China may attempt to assuage the EU to join forces with them in their battle with the other.”

“This may be viewed as a potential positive for the EU economy and the EUR.”

“Trump visits Europe this week to discuss NATO (Wednesday).   His plans include a visit to the UK (Friday) and to meet the Russian President (16-July).   There is a risk that he antagonises or improves his relationship with the EU, or and various times perhaps both.”