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Hello and welcome to World Today, I'm 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 and the country's economic recovery? And we take a closer look at how US Terra 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 European Council President Antonio Costa and European Commission President Ursula von der Leyen, 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 Qiang, fellow of Felden Road Research Center at Minzu 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 diplomatic relations and cooperation relations in the whole world. And EU is one of the largest economy in the whole world and also very important political force internationally. And so is China. I think both sides actually started the 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 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, cornerstone for further and future corporations. So I think ever since that, our relations actually very prosperly growed, especially after the 1998, we have been establishing the comprehensive partnership
So especially after China entered the WTO in 2001, I think China and the EU's diplomatic and also trade relations has been prospering ever since. Ever since that year, I think the EU has become the most important trading partner, technology partner, as well as for economic growth partners continuously after that.
I think after 2003, we have been deep in our relations. Especially after 2013, we have China and the EU cooperation 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 the EU and China has 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 and agree with each other. So I think these,
both continents from the east end to the west end of the Asian, Euro-Asian continent, actually become, showing the whole world a very perfect example of two different economies, two different cultures. 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 background is internationalization of our whole economy, globalization of free trade actually set a very important precondition for China-EU cooperation. I 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 very important. You know, economy, China is the largest developing nations and the EU is probably the largest economy in the developed economy. And also, both sides are focusing on technology, manufacturing, and trade. And EU is one of the largest, you know, consumption market in the whole world. And China is the
growing consumption market of the whole world so actually both sides has a lot of corporations to you know to do with each other for example china used to climb up the value chain try to you know upgrade its economy from the lower end manufacturing labor intensive industry
But now EU have very good technologies in automaking, in aviation industry, in digitalization and 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 automatically.
earned very hands and share through China's development. So I think this is a perfect example of that win-win in a mutual beneficial result. And also, I think China and the EU have signed many agreements and deals. We actually understand each other on many important issues, for example, like climate change, on green energy, environmental protection, and also in trying to by putting 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, Mercedes and BMW and et cetera, and also Schneider's.
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 the whole level of this kind of cooperation has been upgraded.
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 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. I've become one of the most important linkage in the cargos and also passengers, you know, linking through all the dots in the Euro Asia continent and much, much reduced, you know, the transportation time and the cost, you know, between this two ends and also promoted, you know,
efficiency and also the handedness of bilateral trade. Well, a lot of people are arguing, okay, that these kind of the railway transportation is not that, you know, economic. It's not that fast comparing to the ocean transportation. But you have to understand that
This ocean transportation, just dot to dot, means only China and certain countries in EU will benefit from it. But also, when we have this Eurasian railway, this is more like a filter down effect, more like every dot through this line will benefit from this. So this is more like the whole region, the whole belt of
Well, 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, you know, transportation and trade method. When the whole geopolitical conflict has been happening, when there are, you know, coronavirus like the
public health care issues are happening, will we actually become a more reliable, you know, a way to make sure that the fundamental and the most important groceries and, you know, products can be delivered through these, you know,
through this way without being stopped. So I think this showing us that China and EU in ancient times tried to use a Silk Road to communicate and also trade with each other. And now we have this China-EU railway. It showed that the bondage will never end, but only in a new form.
Yeah, but despite the strong economic ties, there are still some frictions, like the EU's investigation into China's electric vehicles. How can both sides manage such disputes properly? And also, given China's strength in green technology and the 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 two trading partners to have some differences or have some argument with each other. This is very normal. Even under one roof, even just the two brothers in one family would argue with each other. So it's just very, very ordinary, you know, phenomenon. So I think the merit for China-EU cooperation is that both sides are
very, very much respecting the multilateral trading systems. We understand equal footing. We understand how we should carry out this argument or try to solve the problems on the multilateral organizations. So 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 the 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 on auto
automakings, now every problem will be solved faster and smoother. So this is the very good result because it's two countenance actually try to understand each other and respect the law. And also through all this kind of the contact, we develop 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 that try to hold shares or investing European Union's green energy companies. So all kinds of these contexts actually broaden our horizon and also not only relieved 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 US tariff policies impacting China-EU cooperation very briefly?
Well, I think number one, we are very, two very strong continent 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 bilateral coordination. And also, thirdly, always uphold multilateralism and free trade. We need to become both leader of this new free world. And also we need to together
Both try to explore the third-party market, linking hand with Africa, with the 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 Qu Qian, fellow of Belt and Road Research Center at Minzu 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% increase from the previous year.
Tourist spending also saw a notable rise, reaching 180.3 billion yuan, an 8% 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%.
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% compared to 2024. What are the main factors driving this continued surge in domestic tourism?
Yeah, so I think the main reason is that 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 travel destinations apart from 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 rose by 6.4% in holiday travel this year.
Yeah, and also border inspection agencies recorded over 10 million entry and exit trips. That's a 29% increase year on year. And of these, over 1 million were by foreign nationals, a 43% increase, with 380,000 visa-free entries, a 72% surge. So what's behind China's growing appeal to international visitors?
Yeah, so I think the visa-free policy definitely contributes a lot to this surge in foreign visitors. Also, honestly, China has very unique food and culture and is doing great in safety. People can walk out of the street at 2 a.m. without any problem. And honestly, I think China has not been visited by a lot of people.
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, has 3000 years of culture, it has lots of places of interest, like 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. So any idea what are the most popular destinations for foreign visitors? And do you think there's
things that can be improved to make China, like these cities, more foreigner or foreign traveler friendly? Yeah, so...
As you have probably heard, like, for example, Zhangjiajie is always a popular travel destination for Korean visitors because of this popular culture in, you know, Korean TV series where, you know, you should take your parents to Zhangjiajie to show that you love them. Also, I think Shanghai is also a very popular destination for foreign visitors, mainly because, you know, it's more international and also there are also lots of
you know, great things to see around Shanghai as well. So as you another question is, is what are the things that, you know, we can improve to make, you know, for visitors more welcoming, feel more welcomed? I think one of the things that we could do is to 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 pronunciation. So I think those things can be slightly improved in the future to make sure that, you know, foreign travels
are becoming more convenient for the visitors. Yes. And when it comes to outbound travel, in addition to those traditional hotspots 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 less popular travel destinations. And so you could expect to have more, sorry, to have less traffic. Also, I think
Another reason that supports this is that we have actually a higher per capita income. So it actually allows travelers to go farther 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 expansion.
changes 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 just quantity, for example. So they prefer to kind of spend on higher quality service and services.
in 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.
year. But I do think this gives a higher... So this recovery, this increase by 8% does give a very positive signal to the growth prospects of 2025. And do you see any shifts in people's spending habits during their travel? 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 visit the common places, right? 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. They're exhibiting, 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
are reflecting that people's demand for services or demand for travel destinations are going above one stage. And actually people are kind of paying more attention to have a basically like a higher or more niche experience different from anyone else.
Well, 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, you know, add the social media or WeChat of the local merchant. And then when we come back, we can continue to order product or even services from these, you know, local merchants. So these continued purchases are going to be tremendously helpful for, you know, local business as well. So overall, I think for the recovery of
of China's economy, you know, this Labor Day holiday, which allow people to go to other places and get to know other merchants in person is a very helpful, you know, practice.
Yeah, and also I think with the 314 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've read from the news that the railway from Shenyang to Jiamusi 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 Changbai Mountains
And the time is going to be shortened from around 5.5 hours to four hours. So continuing investment in infrastructure is definitely going to benefit the domestic travel. And also, I think local regulations, for example,
to organize more buses to pick up and to send the travelers to and from the travel destinations are important. Also to make sure that the local merchants are not ripping off the 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're expecting more foreign travelers and more domestic travelers as well from all over the country. And they should have a long-term plan to make sure that the infrastructure and the services can accommodate the needs of these travelers.
That is Li Lun, 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.
This is World Today. I'm Zhao Ying. Six 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.
Hey, Zhao Yin. So all these six states are in America's New England region in the Northeast. How is this region reliant on trade with Canada? And how will a U.S.-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 Governor Mara Healey, 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, for example, could cost Massachusetts consumers nearly $1 billion, and the cost for the whole New England region in this regard is likely to reach $2.5 billion. And for the state of Maine, the state saw more than $6 million 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.
So 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 U.S. 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 U.S. 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 U.S. state when retaliating against 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 agricultural products that are usually made in red states that voted for Trump, this also will hurt California because California, in addition to its high-tech development, is also a farming powerhouse in America.
I think ultimately, when we talk about tariffs or trade policy, it is mostly a federal matter in the United States. A state government cannot negotiate tariff deals with other countries. Article 1, Section 8 of the U.S. Constitution specifically bans states from entering 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 U.S.,
I mean, 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 U.S. 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. And
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% of Canada's exports are bound for America. That's really unhealthy for the Canadian side. We can even...
somehow argue that this old US-Canada relationship based on cooperation or integration is over. Average Canadians are halting their US-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 honor 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 interests of their localities. Okay, thank you, Ding Hong. This is World Today. Stay with us.
Many European industry insiders say the latest U.S. tariff hikes have negatively impacted local industries. The steel sector has reported losses amid Washington's 25 percent tariff on all steel and aluminum imports. European 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 2 billion euros, which we have lost. And that, of course, leads to capacity reduction and job losses in Europe.
Egert adds the U.S. 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 Liang, professor of economics at Willamette University.
So, Yan, the Europe's economy grew strongly in quarter one of this year, which is the Eurozone GDP grew by 0.4%. However, on April the 2nd, the US 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
How do you think is this going to affect Europe, its growth and European consumers? Well, we know that the U.S. has imposed a so-called reciprocal tariff on April 2nd, the so-called Liberation Day tariff announcements. But very soon after that, on April 9th, Trump has passed 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 very high, a high level of uncertainty as to how these
This reciprocal tariff is going to be reimposed or it's going to be suspended indefinitely. So I think with all these uncertainty, I think the European economies, like many other economies, are still under this very sort of 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 Europeans' exports. And when it comes to the steel and aluminum, that's another layer of exports.
of tariff. And again, the US economy accounts for about 16% of the Europeans exports of steel and also 22% of Europeans exports of automobiles. So all of these just made the European economies a lot more, you know, 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 opportunities.
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 the
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 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 businesses related environment
as well as I would say continue with the fiscal stimulus, which I think 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 debt. 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, their fiscal to GDP ratio was 1.6% back in 2024. And they also have around 63% of the debt to GDP ratio, which compared to many European economies compared to United States are really fiscally restrictive.
So we know that, you know, for countries like Germany, they have been lagging 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
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 on their 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 data center, 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?
Well, 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 equipment, 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, you know, reciprocal tariff is reimposed, including also the tariffs on automobiles and steel and aluminum. So the European economy, you know, is relying on the U.S. market and they also rely 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 are
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 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 US'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 European 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
could take to counter the US's tariff. And in fact, they have been doing that. They have reacted to the US's announcement of reciprocal tariff with their own retaliatory tariff. 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 US's tariff.
And secondly, I think Europeans really need to build alternative trade partners. That includes working together more 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 the least, you know, Europe is also building alliance trade partners with Latin American countries like Mercantil.
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 U.S. market, I think all of these will be helpful for Europe. And 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 weather through these kinds of trade tensions and potential trade wars. That is Yan Liang, professor of economics at Willamette University, speaking with Zhao Yang. This is World Today. Stay with us.
You're listening to World Today. I'm Zhao Ying. 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 us, 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, maintain its own stance as the so-called to defend their own rights of the peaceful use for the enriched uranium, while on the other hand,
without violating United States demands for the total disarmament. Because actually they are talking about the same thing, because United States hopes that the nuclear weapons should not be constructed while Iran maintains that their rights for enriched uranium should be protected. So that is why I think
The two sides are negotiating. Their negotiations are still being delayed, but actually are constructed based upon the very solid shared view that no nuclear weapon should be built and also that the sanctions might be 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 a kind of 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 gives the excuse of 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 within the recent days that Iran maintained that
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, particularly the leadership circle of the national security area inside the United States, now are facing a kind of new leaders.
of transferring. So that is why this kind of new leadership nomination and other procedures delay the 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 factors and other technical factors delay the negotiations
the negotiation that should be held days ago. But actually, I think the negotiation will continue and Oman will continue to play a very important mediating role. Well, 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, the United States is sending very conflicting views or conflicting signals because on the one hand, the United States hopes to sit down and talk with Iran, while on the other hand, maybe the United States leadership and very high-level ranks are trying to send signals of threats, sending signals of
pressure to Iran 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 backdrop, United States leadership should give some very assertive or even aggressive words to Iran. Well, on the other hand, on the negotiation table, some encouraging words and very realistic manners should be taken to continue the talks.
So that is why now we're looking at is a 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 stances on the negotiation table, it is very difficult for the both sides to make a deal because when we're talking about making the kind of agreement, it should be based upon the discussion and should be based upon the very precondition is the very unified
voice in different camps. So that is why inside the 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 Iran and how to encourage or disencourage Iran to do something while not to do something else. So that is why I think the United States still has 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 that when the Iran nuclear deals talks are continuing, when the possibilities of reaching the deal is still there, we should always encourage and expect 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 were held,
are held, maybe a new agreement or even temporary agreement could be reached between the two sides. We could wait and see. Okay. Thank you, Dr. Wang Jin, Associate Professor at Northwest 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. terror fakes 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.