MERICS Top China Risks 2025

Trump, de-risking, trade disputes: 2025 will be a year of adjustments

For Europe, 2025 will be a year of adjustments. Donald Trump’s return to the White House will alter US foreign policy. He has pledged to compete on tougher terms with China through tighter restrictions on trade and technology that will hit Europe too. Beijing is most likely to respond by taking a more hardline approach to any attempts at de-risking. As a result, Europe could find itself squeezed by simultaneous trade disputes with its two largest economic partners, while dealing with Russia’s full-scale invasion of Ukraine. 

To help European actors anticipate what 2025 might bring, MERICS has developed a foresight effort to identify key China risks. We sought to pinpoint risks with the biggest impact on European interests and security. We identified them by hosting two separate, off-the-record foresight workshops with officials and experts from across Europe. They assessed how the US elections would impact Europe-China relations and the EU’s China policy. We then held a further, internal workshop with analysts from all of MERICS research teams to refine our selection of risks.

MERICS Top China Risks 2025 consists of the most probable and highest impact risks we identified, the ones that have urgent implications for European policymakers and businesses. We will track them throughout the year in upcoming issues of the MERICS China Security and Risk Tracker.

Nor will we lose sight of the risks our expert groups thought less impactful or less likely to materialize in 2025. Many harbor the potential for major implications in Europe. Among such risks, we include the challenges to social cohesion in China, the possibility of conflict in the South China Sea, or the collapse of international cooperation on climate or other global issues. 

In 2025, European actors should brace themselves for greater risk and uncertainty in relations with both China and the United States. The new Trump administration will set in motion global geopolitical and geoeconomic changes. European actors will have to find ways to navigate them without losing sight of Europe’s key interests and objectives.

Top China Risks 2025

The United States’ new China (and Europe) policies: Trump’s return, and Beijing’s response, will challenge Europe’s unity and de-risking agenda

The biggest risk for Europe’s China policy next year lies in the geopolitical adjustments after president-elect Donald Trump returns to the White House in January. The new administration’s top foreign policy appointees may hold different views of the US role in the world, but they share a view of China as the main threat to US interests. The Trump administration will take a hard line on trade and tech relations with China from the start, whether as a push to bring Beijing to the negotiation table, or as a way to limit China’s global influence. 

Either way, we can expect a rapid deterioration in already-strained US-China ties. Similar dynamics could play out in the transatlantic relationship if Washington decides to use tariffs to target its trade deficit with the EU. Transatlantic tensions would also grow if Washington decided to reduce US support for Ukraine and NATO in order refocus US efforts on the Indo-Pacific.