Hello and welcome to World Today.
I am Zhao Ying. Tuesday marks the 50th anniversary of diplomatic relations between China and the European Union.
How has the relationship evolved over the past five decades?
China saw a travel boom during the May Day holiday.
What does it reveal about consumer confidence in the country's economic recovery.
And we take a closer look at how U .S. terror pikes are impacting European industries.
Chinese President Xi Jinping has exchanged congratulations with top EU leaders on the 50th anniversary of diplomatic relations between China and the European Union.
In a message with the European Council President Antonio Costa and European Commission President and Cecily von der Laian, President Xi said that healthy and stable China -EU ties not only promote mutual achievements but also illuminate the world.
A Chinese foreign ministry spokesperson said China welcomes the EU leaders to visit China for a new round of China -EU summit at a proper time.
China also said on Tuesday that it had reached an agreement with the European Parliament to lift all restrictions on exchanges.
A ministry spokesperson said China believes it will deepen understanding and inject new impetus into the development of ties.
For more, we are joined by Professor Qu Chang, Fellow of Belt and Road Research Center at Minzhou University of China.
Professor Qu, thanks for joining us.
Thank you. So how would you characterize the evolution of China -EU relations over the past 50 years?
Well I think this relations is probably one of the most important, you know, developmental relations and cooperation relations, you know, in the whole world.
And the EU is one of the largest economies in the whole world and also very important political force internationally.
And so is China. I think both societies actually started diplomatic relations ever since 1975.
And I think the first round ended at the beginning of the 1990s.
So I think at that time, we have, you know, preliminary touch with each other, and we have signed up many economic and trade cooperation deals with each other, and set a very firm stone, you know, cornerstone for our further and future cooperations.
So I think ever since that, our relations actually, you know, very prosperably grow.
Especially after the 1998, we have been establishing the comprehensive partnership.
So especially after trying to enter the WTO in 2001, I think China and EU, diplomatic and also trade relations has been prospering ever since.
Ever since that year I think EU has become most important trading partner, technology partner, as well as four economic growth partners, continuously after that.
And I think after 2003 and we have been deep in our relations, especially after 2013, We have China and EU Corporation in 2020, you know, strategic planning, and that has been making a lot of the very important key points for our future relations.
And now I think EU and China have become each other's most important cooperation partners in technology and trade, in services as well as in international affairs.
We've been working with each other very, very closely.
we have been, to a very large extent, put aside our differences politically and try to understand or agree with each other.
So I think these, you know, most continent are from, you know, on the east end to the west end of the Asian, Euro -Asian continent actually become, you know, showing the whole world a very perfect example of two different, you know, economy, two different culture, how can they actually properly work with each other.
Yeah. And in terms of trade, actually trade between China and the EU has skyrocketed from 2 .4 billion US dollars in 1975 to nearly 780 billion US dollars today.
What factors have driven this dramatic expansion and how sustainable is this growth going forward?
Well I think the number one is background is the internationalization of our whole economy, globalization of free trade, actually instead of important preconditions for China -EU cooperation.
As just mentioned, ever since China entered the WTO in 2001, our economic bondage actually has been much, much closer with each other.
Actually, these two economies are very complementary to each other.
Both sides are a very important economy.
China is the largest developing nation, and the EU is probably the largest economy in the developed And also both sides are focusing on technology, manufacturing, and trade.
And the EU is one of the largest consumption market in the whole world.
And China is the growing consumption market of the whole world.
So, actually, both sides have a lot of cooperation to do with each other.
For example, China used to climb up the value chain, try to upgrade its economy from the lower end of manufacturing labor intensive industry.
But now, EU have very good technologies in auto -making, in aviation industry, in digitalization and a precise mechanics and those are helping China to grow very quickly in this industry.
But don't get it wrong, China is not only competing with EU, but also have to understand the EU by investing in China, having stock in China, investing in Chinese technology also earned very hands -on share through China's development.
So I think this is the perfect example of the wing -wing and a mutual beneficial result.
And also I think China and the EU have signed many everyman's and ideals.
We actually understand each other on many important issues, for example, like climate change, on the green energy, environmental protection, and also in trying to put aside our differences in political opinions.
And also I think the cross -holding of the joint stocks actually have been very prevailing behavior among China and the EU.
In the past 20 years, I think many European companies have been investing in China, like a very famous auto company, the Mercedes and the BMW and etc., and also Shmiders.
But also in recent years, I think many Chinese enterprises are also reinvesting back in the EU as well.
So actually, I think the trade and investment balance has been much more improved, and And also right now, since we have the digital economy, renewable energy, EV and also AI, I think many new fronts has become opportunities for us to work with each other.
So I think this has become our major reason that why our trade and economy together has been expanding.
Yes, indeed, and also the China Europe Railway Express has, is often seen as a success story of China EU cooperation.
How has this infrastructure impacted bilateral trade and what potential does it hold for future economic ties?
Well, I think we have started the express railway ever since 2011 and become one of the most important linkage in the cargoes and also passengers linking through all the dots in the Euro -Asia continent and much, much reduced transportation time and cost between these two ends and also promoted efficiency and also the handiness of bilateral trade.
well, a lot of people are arguing, okay, that these kinds of the railway transportation is not that economic, is not that fast comparing to the ocean transportation.
But you have to understand this ocean transportation, just a dot to dot means only China and certain countries in you will benefit from it.
But also when we have this Eurasian railway, this is more like a filter down effect and more like every dot through this line will benefit from this.
So this is more like the whole region.
The whole belt will benefit from this.
This is a very important epitomization of belt and road strategy.
And also more important than that, this is a very robust transportation and a trade method.
When the whole geopolitical conflicts has been happening, when there are coronaviruses like the public healthcare issues are happening, railway actually become a more reliable way to make sure that the fundamental and most importantly groceries and you know products can be delivered through this way without being stopped.
So I think this showing us that China and EU in the ancient times try to use the Silk Road to communicate and also trade with each other and now we have the China -EU railway, it showed that the bondage will never end but also but only in a new form.
Yeah, but despite the strong economic ties, there are still some frictions like the EU investigation into China's electric vehicles.
How can both sides manage such disputes properly, and also given China's strength in green technology and EU's carbon neutrality goals, could such tensions be transformed into opportunities for cooperation?
Well, that's a very good question.
And I think this is very normal for trading partners to have some differences or have an argument with each other.
this is very normal even under one roof even just the two brothers in one family will argue with each other so it's just a very, very ordinary, you know, phenomenon.
So I think the merit for China -EU cooperation is that both sides are you know very, very much respecting the bilateral, sorry, the multilateral, you know, trading systems. So we understand equal footing, we understand how we should carry out this argument or try to solve the problems on, you know, the multilateral organizations, for example, respecting the rules, respecting the WTO, and also try to use the legal process to understand and also solve the kinds of the differences on trade.
And also through all this kind of problem solving process, we just made our argument solving process even better and sounder, to make all the rule of law even better and sounder between China and EU.
So, you see, after all these years when China and EU have some new argument, for example, on iron and steel, for example, on electronic devices or auto makings, now, every problem will be solved faster and smoother.
So, this is the very good result because its two accountants actually try to understand each other and respect the law.
And also, through all these kind of contact, we developed lots of the common opportunities.
For example, we understand each other in EV industry now.
Many EU companies try to hold shares in Chinese EV companies.
Vice versa, Chinese companies try to hold shares or invest in European Union, green energy companies.
So all kinds of these contexts actually broaden our horizon and also not only relief our frictions, but also put forward our common interest and also push forward the global common course like reducing the climate change and also using the green energies together.
Yeah and how do you see the external pressures such as U .S. tariff policies impacting China -EU cooperation, very briefly?
Well I think – number one, we are very too very strong continent and economy.
We have to stand up our own feet.
We need to work independently.
And secondly, I think it's just we need to strengthen and further our internal international cooperation by lateral coordination.
And also thirdly, always uphold multilateralism and free trade.
We need to become both leaders of this new free world.
And also we need to together both try to explore the third party market, linking hand with Africa, with Middle East, with Latin America.
This will be our both opportunities.
And also last but not least, try to focus on the future.
try to focus on the common ground, like climate change, green energy, EV development, as well as to make the world a more peaceful place for our future generation.
Thank you, Professor Cheu -Chien, fellow of Belt and Road Research Center at Minsu University of China.
This is World Today.
We'll be back. You're listening to World Today.
I'm Zhao Ying. Authorities say Chinese travelers took an estimated 314 million domestic trips during the five -day May Day holiday.
The Ministry of Culture and Tourism says the figures represented a 6 .4 percent increase from the previous year.
Tourist spending also saw a notable rise, reaching 180 .3 billion yuan, an eight percent year -on -year jump that highlights the sustained vitality of consumer activity.
Meanwhile, the National Immigration Administration says the country registered over 10 million cross -border trips during the holiday, an increase of 28 .7 percent.
For more, we are joined by Li Lun, assistant professor of economics from Peking University.
Domestic travel during this year's Labor Day holiday rose by 6 .4 percent compared to 2024.
What are the main factors driving this continued surge in domestic tourism?
Yeah, so I think the main reason is that, you know, the consumers are actually having an improved level of confidence and also there's a higher demand for leisure travel and one fact that I noticed this year is that a lot of people are choosing to go to you know travel destinations apart from you know the big city or the or the conventional places of interest and choose instead to go to smaller cities or you know cities that have not previously been the hot the hottest places for travel.
So I think those reasons combined can explain this rows by 6 .4 percent in holiday travel this year.
Yeah and also border inspection agencies recorded over 10 million entry and exit trips.
That's a 29 percent increase year -on -year and of these over 1 million were by foreign nationals 43 % increase with 380 ,000 visa -free entries 72 % surge.
So what's behind China's growing appeal to international visitors?
Yeah, so I think the visa -free policy definitely contribute a lot to this surge in foreign visitors.
Also, honestly, China have very unique food and culture and, you know, is doing great in safety.
people can walk out of the street in like 2am without any problem.
And honestly, I think China has not been visited by a lot of people around the world.
I mean, I think, especially in the Western Hemisphere, people are kind of having this mysterious feeling about China.
So, I mean, for example, I think where I live, Beijing, it has 3000 years of culture, it has lots places of interest, like for the Forbidden City, the Great Wall and so on.
So these are going to be very unique experiences for foreign visitors.
So I think that's behind the reason why so many visitors are choosing to come to China during the Labor Day holiday.
Any idea what are the most popular destinations for foreign visitors?
Do you think there are things that can be improved to make China these cities more foreigner or foreign traveler friendly?
Yeah, so as you have probably heard, for example, Zhang Jiajie is always a popular travel destination for Korean visitors because of this popular culture in Korean TV series where you should take your parents to Zhang Jiajie to show that you love them.
Also, I think Shanghai is also a very popular destination for foreign visitors, mainly because it's more international and there are also lots of great things to see around Shanghai as well.
So another question is what are the things that we can improve to make foreign visitors more welcoming, feel more welcomed?
I think one of the things that we could do is to make domestic travel easier for foreign visitors because sometimes you know when they are traveling by themselves they don't have local translators or local guides they could for example book the wrong ticket or go to the wrong destination as we have seen in examples where you know two foreign visitors wanted to travel to Suzhou but instead booked their ticket to Suzhou, another place with similar pronunciations So I think those things can be slightly improved in the future to make sure that foreign travels are becoming more convenient for the visitors.
Yes. And when it comes to outbound travel, in addition to those traditional hot spots like Japan, South Korea, Southeast Asia, bookings to emerging destinations such as Iceland, Morocco and Kazakhstan have doubled.
What do you think is fueling Chinese travelers' interest in these less conventional destinations?
Yeah, so part of the reason I think is definitely to avoid the holiday traffic from fellow Chinese travelers.
For example, Japan, whether you go to Tokyo or other common big cities in Japan, the streets are packed with Chinese travelers.
So I think these more niche travel destinations like what you mentioned, Iceland, Morocco and also New Zealand for example.
These are you know less popular travel destinations and so you could expect to have more sorry to have less traffic.
Also I think another reason that support is is that we have actually a higher per capita income so it actually allows travelers to go further across the globe you know to explore you know countries in another continent that they haven't been to so that's also I think a very important reason behind this changes in in travel destinations.
Well domestic tourism spending rose 8 % to 180 billion yuan while outbound spending per traveler increased by 12 % What does this suggest about China's economic recovery and consumer confidence heading into mid 2025?
Yeah so my understanding of this is that when it comes to services, for example, spending on restaurants and hotels, people still have a pretty high willingness to pay.
So people are actually preferring quality over, you know, just quantity, for example.
So they prefer to kind of spend on higher quality service and food, for example.
But this gives a very good signal about the economic recovery.
But I do think that local merchants needs to have a little caution about this trend because Labor Day is a special time of the year.
So they have to make sure not to overestimate the growth potential later this year.
But I do think this gives a higher, so this recovery, this increase by eight percent does give a very positive signal to the growth prospects of 2025.
Do you see any shifts in people's spending habits during their travel and and how do you think these travel patterns are reflecting the shifting values priorities or lifestyles among China's growing middle class?
Yeah so I think previously when it comes to holiday travel people just you know the common places, the big cities, or just the common places of interest, the famous mountains, but right now I think these travel destinations are becoming more diverse.
So people are exhibiting more personal choice and they're willing to kind of go to unique places, avoid the crowd and have a better experience, which they can share to their friends and family on social media.
So I think this demand for unique travel experiences are reflecting that people's demand for services or demand for travel destinations are going above one stage and actually people were kind of paying more attention to have basically a higher or more niche experience different from anyone else.
Which industries are reaping the most benefit from the holiday travel boom?
And what implications could this have for China's broader economic trajectory?
Yeah, the most straightforward ones are, of course, local hotels and restaurants because when people travel, they have to stay and to have food.
But another trend that I want to point out is that local merchants actually benefit a lot from domestic and foreign travel, especially for domestic travel.
Since I don't know if you have noticed, right now it has become very common when we go to another place is to add the social media or WeChat of the local merchant.
Then when we come back, we can continue to order product or even services from these local merchants.
These continued purchases are going to be tremendously helpful for local business as well.
So so overall, I think for the recovery of China's economy, this Labor Day holiday, which allows people to go to other places and get to know other merchants in person, is a very helpful practice.
Yeah. And also, I think with the three hundred and fourteen million domestic trips and over 10 million international movements, That's a huge test for China's infrastructure.
What steps is the government taking to manage this growth and promote more sustainable tourism practices?
Yeah, so of course what we're seeing and what the government is actually doing is putting more investment in infrastructure.
So, for example, recently I read from the news that the railway from Shenyang to Jiangsu is planning to be opened this late September.
which means that for the October 1st holiday we're able to, for example, take a train from Beijing to the Chiang Mai Mountains and the time is going to be shortened from around 5 .5 to four hours.
So continued investment in infrastructure is definitely going to benefit the domestic travel.
And also I think local regulations, for example, you know to organize more buses to pick up and and to send the travelers to and from the travel destinations are important, also to make sure that you know the local merchants are not you know ripping off the you know travelers and charging overly high prices to them are also important, but more importantly I think the government, especially local government, should be prepared to face a different future where we are expecting more foreign travelers and more domestic travelers as well from all over the country and they should have a sort of a long -term
plan to make sure that the infrastructure and the services can accommodate the needs of these travelers.
That is Li Leung, assistant professor of economics from Peking University Coming up, six U .S. states have invited Canadian provincial leaders to discuss Trump's tariffs.
Many European industries insiders say the latest U .S. tariff hikes have negatively impacted local industries.
And Iran says its stance on nuclear talks with the U .S. remains constant.
You're listening to World Today.
Stay with us. 6 U .S. state governors have invited Canadian provincial leaders to discuss the impact of tariffs imposed by President Donald Trump.
Governors of Massachusetts, Maine, New York, Connecticut, Rhode Island and Vermont extended the invitation to the premier of six Canadian provinces.
Plans are underway to hold a discussion in Boston on how American and Canadian leaders can continue to work together to maintain trade relations.
In a statement, the Massachusetts Governor says Washington's tariffs are undermining U .S.-Canada ties.
The Maine Governor is calling the tariffs' haphazard and Trump's rhetoric harmful.
Joining us now in the studio is my colleague Ding Hong.
Thanks for being here.
How you doing? So all these 6 states are in America's New England region in the North East How is this region reliant on trade with Canada and how will a US -Canada trade war hurt these states?
Well, let's take a look at some individual cases for Massachusetts Canada is the state's number one trading partner According to Massachusetts' Govenor Maura Headle, for generations Massachusetts and the Canadian side have enjoyed a strong partnership and a healthy exchange of energy, lumber, dairy, cars and car parts, seafood and more.
Now this partnership is being undermined by President Donald Trump's tariffs, making it harder for businesses to keep their doors open.
Trump's tariffs on Canadian energy alone could cost Massachusetts consumers nearly 1 Billion US Dollars The cost for the whole New England region is likely to reach 2 .5 Billion US Dollars For the state of Maine, the state saw more than 6 million US dollars in commerce with Canada in 2024.
Canada represents the largest foreign supplier of oil to the United States.
Energy products including crude oil and petroleum products account for some 30 % of all Canadian exports to America.
Cars, tractors, and auto parts are the second largest category, followed by machinery, and mechanical appliances.
For states including Maine, Massachusetts, and Rhode Island, petroleum and coal products are their top imports from Canada.
For Connecticut, aerospace products are leading its imports from the Canadian side.
So I think overall it is very fair to say that the New England region relies heavily on Canadian trade and the threat of a trade war is a cause for concern.
Well, this is not the first time individual US states have reached out to other countries in efforts to avoid getting caught in a standoff between the Trump administration and their key trade partners.
Actually, last month, California governor Gavin Newsom made a direct appeal to other countries to spare his state from retaliation over Trump's trade policies.
But realistically how much can individual US states avoid getting caught in Trump's trade wars?
Well, I think we are yet to see an actual case where another country can spare products from a particular US state when retaliating against the Donald Trump's tariffs.
Such a case will be in many cases unprecedented.
A more common practice we have seen so far is that Certain countries choose to retaliate by targeting goods that are commonly produced in states that voted for Donald Trump.
But this practice does not guarantee that other states will not get hurt.
To give you an example if you target American agriculture products that are usually made and in red states that voted for Trump, this would hurt California, because California in addition to its high tech development is also a farming powerhouse in America.
So I think ultimately when we talk about tariffs or trade policy, it is mostly a federal matter in the US, a state government cannot negotiate tariff deals with other countries.
Article 1, Section 8 of the U .S. Constitution specifically bans states from entry into treaties with foreign nations.
If a state ever tried to negotiate a binding trade agreement, it would likely be struck down by courts in America or blocked by the federal government.
that's the reality.
So while a state government can certainly engage with foreign countries to promote the state's businesses or industries, I guess the reality is that doing that is unlikely to counterbalance or offset the impact of Donald Trump's sweeping tariffs.
Well, Canada's newly elected Prime Minister, Mark Carney, is on a trip to White House to meet with Donald Trump, he has regularly termed Trump's actions as a betrayal and says Canada must reduce its reliance on the US.
Do you think that's the best choice for Canada regardless of what trade deals will end up reaching with Trump?
Well, first of all, with regard to this particular meeting that you mentioned between Carney and Trump.
I don't think the US President is showing enough respect to Carney.
He has openly said that he doesn't know why Carney wants to meet him in the White House.
That's his open statement.
In putting away this meeting I certainly agree that Canada will have to dramatically reduce its dependence on the United States in a situation where 75 percent of Canada's exports are bound for America that's really unhealthy for the Canadian side we can even somehow argue that still this old u .s. Canada relationship based on cooperation or integration is over average Canadians are halting their u .s. bound tourism and some of the Canadians who have been living in the United States for a long long time are nowadays selling away their U .S. properties and going back north because they no longer feel
welcomed or secure or safe in America.
It is possible that with certain so -called comprehensive negotiations, the two sides might be able to re -establish some kind of confidence, but once the rift is already manufactured, there will be no going backwards for the Canadian side.
Otherwise I guess other countries or other people will question Canada's national honour or integrity.
And by the way, the governor of Vermont is actually from Trump's Republican Party.
What does this tell us about the renewed domestic political backlash against Trump's tariffs, very briefly?
Yeah, so the growing political backlash domestically is very obvious but in the meantime, it has not reached its full potential, I think.
The governor of New Hampshire which also belongs to the New England region is also a Republican, he was invited to join this action but declined.
But going forward, we will probably see more Republicans coming out to voice their open disagreements because as I said earlier, countries are retaliating by targeting products commonly from Republican Red states.
So, going forward, if trade war persists, more and more Republicans will probably come out to say that tariffs are not in the best interest of their localities.
Okay, thank you, Dingheng.
This is World Today, stay with us.
Many European industry insiders say the latest US tariff hikes have negatively impacted local industries.
The steel sector has reported losses amid Washington's 25 % tariff on all steel and aluminum imports.
European and Steel Association Director General Axel Eggert says their steel exports to the U .S. have plummeted since the tariffs were imposed.
So, we have lost 1 million tons.
We are talking of a value of around about 2 billion euros, which we have lost. That of course leads to capacity reduction and job losses in Europe.
Agate adds the US tariffs go beyond mere trade disputes to present strategic challenges to Europe's industrial framework.
Europe's economy grew more strongly in the first quarter of the year with Eurozone GDP rising 0 .4 percent, up from 0 .2 percent in the fourth quarter of last year.
But how will the U .S. tariff policies affect the European economy in the coming months?
And which sectors are likely to be hit the hardest?
For more on this, my colleague Zhao Yang spoke with Yan Leong, Professor of Economics at Willamette University.
So Yan, Europe's economy grew strongly in quarter one of this year, which is the eurozone GDP growth by 0 .4%.
However, on 2 April, the U .S. announced new tariffs on almost every trading partner and hit the goods imported from the European Union with a 20 % tariff rate.
And this has led to widespread downgrading of Europe's economic outlook.
So how do you think is this going to affect Europe's growth and European consumers?
Well, we know that the U .S. has imposed, the so -called reciprocal tariffs on April 2nd, so -called Liberation Day tariff announcements.
But very soon after that, on April 9th, Trump has paused these tariffs for about 90 days.
So I think that gives a little bit of breathing room to the European economies, but that said, because the trade negotiations supposedly are ongoing and there's still a high level of uncertainty as to how these reciprocal tariffs is going to be reimposed or it's going to be suspended indefinitely.
So, I think with all this uncertainty, I think the European economies, like many other economies, are still under this very high level of stress, because we know that the European economies are very reliant on the U .S. markets.
the United States account for about 20 % of the European's exports.
And when it comes to the steel and aluminum, that's another layer of tariff.
And again, the US economy accounts for about 16 % of the European's exports of steel and also 22 % of Europeans exports of automobiles.
So all of these just made the European economies is a lot more so called export dependent on the United States.
So depending on whether or not these tariffs will be reimposed, including this reciprocal tariff, and also steel and aluminum, and also automobiles, I think if these tariffs are going to be reimposed that would really affect the European economy in a very negative way.
But in the interim, I think the economy is still facing a lot of uncertainty, so I think that would pose some negative outlook on the European economy.
And with the inflation down to 2 .2%, the ECB has lowered the interest rate seven times in its current easing cycle, and most recently, by a quarter of a percentage point in April.
So could you explain how this will help?
Well, we know that lowering the interest rate has some stimulative effect on the economy because that basically makes credit cheaper for businesses and also for households.
So, in some ways, it could help to stimulate business investments and also allow the households to buy more on credit and stimulate consumption.
So in that regard, I think, lowering the interest rates in light of decelerating inflation, I think it's a bonus, it's helpful for the European economy.
But that said, when the economy is facing heightened uncertainty, right?
when it comes to investment decisions, when it comes to big ticket item consumption demand, I think with the uncertainty even with the lower interest rate, it may not help to really move the needle.
So I think like many other economies, again European economy is still facing this high level of uncertainty.
So although lowering interest rates is helpful on the margin, I think there's still a lot more the European economies needs to be doing in order to stimulate its economy.
And that includes of course looking for new trading partners, looking for more different export destinations, but also strengthening their own domestic investments, including public investments to reform their regulations and other, you know, businesses related environment, as well as I would say continue with fiscal stimulus, which I think in recent year, sorry, in recent months, it seems to be more positive when countries like Germany is rolling out more stimulus on the fiscal front.
You mentioned the German parliament has approved a 500 billion Euro investment fund that is exempt from the country's constitutional limits on that, so how can this really help Germany's economy?
Well, I think this will be a positive step.
We know that the German government has been really ultra conservative when it comes to fiscal spending.
Their debt to GDP ratio was at 1 .6 percent back in 2024 and they also have around 63 percent of the debt to GDP ratio which compared to many European economies compared to the United States are really fiscally restrictive.
So we know that you know for countries like Germany, they have been in public investment, they're also very lagging in the technological innovations and some of the digital infrastructure construction.
So I think relaxing this budget constraint will really help Germany to roll out this long awaited public investment, especially in digital infrastructure and other I think helpful investments in the public sector.
Well, that said, I think there's also tremendous pressure on the German government's part to increase the under -defense spending, which I think it's not that desirable, because I think that for a lot of the budget spending, it should be spent on civilian projects, like for example, upgrading their infrastructure in the digital space, also help to build more AI -related infrastructure like datacenter, which I think many of the European economies are very much lacking at this point.
And if the US tariff policies do not change, which sectors will be mostly hit in Europe?
As we just mentioned, I think European economies very much rely on the US market.
So for many of the automobile sectors, for manufacturing sectors, especially manufacturing equipment, machinery, and some of the intermediate products, I think all of these will be affected.
And as I also mentioned earlier, Europe does rely on exporting about 16 % of their steel to the United States.
So I think all of these sectors especially in the manufacturing sector will really be hard hit.
If that punitive reciprocal tariff is reimposed including also the tariffs on automobiles and steel and aluminum.
So the European army is reliable on the U .S. market and they're also relying on some of the advanced manufacturing, and these tariffs are not going to be conducive to those sectors.
And Europe is deeply concerned about American tariffs.
What options does Europe have and what do you think they could do to offset the US tariff effect?
Well, I think first of all, Europe should not just cave in to the US's pressure.
I think this is the approach that you know China has been taking and China has been calling for other countries to also form some kinds of unity and take collective actions against the U .S's unilateralism, the kind of bullying.
So I think Europe still imports a lot from the United States when it comes to services.
And so, I think that the Europeans also had their own regulations when it comes to, for example, digital services, and the regulations on some of the large multinational corporations, especially in the e -commerce and digital services sector.
So, I think those could be some leverage that the European countries could take to counter the U .S.'s tariff.
And in fact, they have been doing it.
They have reacted to the U .S.'s announcement of reciprocal tariffs with their own re -territory tariffs.
But of course, both sides now are taking the pause right now.
But I think the first step is for the European countries to take some collective actions to counteract the U .S.'s tariff.
And secondly, I think Europeans really need to build alternative trade partners.
that includes working together and work closely with China.
China is not just a competitor, right?
China is a competitor, but this competition can be constructive.
But also China is a very important trade partner.
So hopefully there will be more breakthroughs in the trade relationships between China and Europe because after all, China is the largest trading nation.
So if the two parties could come to some kind of agreement, I think that would be helpful for Europe.
And last but not least, you know, Europe is also building alliance trade partners with your, sorry, with Latin American countries like Macon, Seoul.
And so I think that is also helpful.
So in other words, I think diversifying export destinations, building more trade partners, reduce the reliance on the US market.
I think all of these will be helpful for Europe.
Last but not least, I think really is to strengthen their own economies through fiscal stimulus, through monetary easing, and boosting the domestic demand, boosting domestic industrial upgrading, increasing their public investments, and build more unified market within Europe.
I think all of this will help Europe to wither through this kinds of trade tensions and potential trade wars.
There is Yan Liang, professor of economics at Willamette University speaking with Zhao Yang.
This is World Today.
Iran says it remains committed to diplomacy with the United States after postponing a fourth round of nuclear talks with Washington for logistical reasons.
A Foreign Ministry spokesperson said Tehran was flexible regarding the timing of talks and was waiting for details from mediators regarding the next round of negotiations with the U .S. The spokesperson said contradictory statements from U .S. officials were unhelpful and would not impact Iran's determination to defend its fundamental positions, including its right to enrich uranium domestically.
U .S. Secretary of State Marco Rubio said earlier that Iran should import enriched uranium for its nuclear program rather than having the ability to enrich uranium at home.
U .S. President Donald Trump said the goal of the negotiations with Iran is to achieve full dismantlement of Tehran's nuclear program.
For more, we are joined by Dr. Wang Jin, associate professor at Northwest University in Xi 'an, China.
Thanks for joining you, Dr. Wang.
Thanks for having me.
So Iran insists its nuclear program is for civilian purposes and defends its rights to enrich uranium under the NPT.
But how realistic is it for Iran to maintain this position, given the U .S. demands for total dismantlement of its nuclear program?
I think it's very realistic for Iran to on the one hand to maintain its own stance and so -called to defend their own rights of the peaceful use for the enriched uranium.
While on the other hand, without violating the United States demands for the total disarmament, because actually they are talking about the same thing, because United States hope that the nuclear weapons should not be constructed while Iran maintain that their rights for the in which the uraniums should be protected.
So that is why I think the two sides are negotiating their negotiations, although being delayed, but actually are constructed based upon the very solid shared views that no nuclear weapon should be built and also that sanctions should be lifted.
lifted. So that is why I think the negotiation now also being delayed now would benefit both Iran and the United States, and it's very realistic and possible that Iran and the United States could find the kind of the middle point.
Well, Oman as a mediator cited logistical reasons for postponing the recent round of talks.
But could there be some deeper political or strategic factors at play behind that delay?
Yes, of course, as you mentioned, Oman has executed so -called logistical reasons, but the problem is that Iran has already been prepared for the next round of talks and Iran, according to Iran's point of view, just the days within the recent days that the environment came, it is the United States problem that leads to the delay of the talks.
Well, I think it is some kind of a technical problem because we know that inside the United States, some higher levels is particularly the leadership circle of the national security area inside the United States now are facing the kind of the new leaders of transferring.
So that is why this kind of the new leadership nomination and other procedures delayed United States deployment of the new negotiation team.
That is why further lead to the delay of the talks.
So that is why I think it is something political and factors and other technical factors delay the negotiation that should be held days ago.
But actually I think the negotiation will continue Our men will continue to play a very important mediating role.
While Iran has accused the U .S. of sending contradictory messages, what do you think is really behind these mixed signals from the U .S.?
Like, is there a coherent U .S. policy on Iran right now, or are we seeing internal divisions within the Trump administration?
I think you are right.
Actually, from Iran's perspective, that United States are setting very conflicting views or conflicting signals, because on the one hand, United States hopes to sit down and talk with Iran.
While on the other hand, maybe the United States leadership and the very high level ranks are trying to sending the signals of threats, sending the signals of pressure to Iran and that makes Iran dissatisfied.
But it should be understood as signals transferred towards different public opinions.
if the public opinions inside the United States, there were still many people who held very, very hostile and very, very hesitating views towards Iran.
They do not trust Iran.
They hope that the negotiation should be suspended.
So against this back job, United States leadership should give some very assertive or even aggressive words to Iran.
Whereas on the other hand, on the negotiation table, some encouraging words and very realistic manner should be taken to continue the talks.
So that is why now we're looking at the very, very conflicting views.
But when the negotiation continues, everything will become possible.
Yeah. And also Trump has emphasized total dismantlement as the only acceptable outcome.
But we know that some within his administration actually see that it is acceptable for Iran to maintain a civilian nuclear program, how might this internal debate affect the trajectory of future negotiations?
Yes, the internal debate is always a very determining factor for the negotiation because without the very unified united stance on the negotiation table, which is very difficult for both sides to make a deal, because we're not talking about making the kind of agreements.
It should be based upon the discussion and should be based upon the very precondition if they're very unified voice in different camps.
So that is why inside United States, as you mentioned, there were still a lot of debates, whether Iran should be trusted and what kind of measures should be taken against the Iran and how to encourage or disencourage Iran to do something or not to do something else.
So that is why I think United States do have a division and this division.
I don't think it is very difficult, very easy to end given the very conflicting internal United States political scenario, as well as United States leadership's transforming views against how the Iran nuclear issue should be settled.
But again, as we mentioned, when the Iran nuclear deal talks are continuing, when the possibilities of reaching the deal is still there, we should always encourage and expected that the deal could be reached.
So that is why I think maybe in the next few days, maybe when the new round of talks are held, maybe a new agreement or even temporary agreement could be reached between the two sides.
We could see. OK, thank you Dr. Wang Jing, Associate Professor at Northwestern University in Xi 'an, China.
And that's all the time we have for this edition of World Today.
A quick recap of today's headlines, President Xi Jinping and EU leaders exchanged congratulations on the 50th anniversary of diplomatic ties.
China saw a travel boom during the May Day holiday.
Six U .S. states have invited Canadian provincial leaders to discuss Trump's tariffs.
Many European industry insiders say the latest U .S. tariff hikes have negatively impacted local industries, and Iran says its stance on nuclear talks with the U .S. remains constant.
To listen to this episode again or to catch up on previous episodes, you can download our podcast by searching World today.
I'm Zhao Ying. Thank you so much for listening.
See you next time.
