The China Shock Domino Effect

As the U.S. and EU tariff China, Beijing will seek new export markets.

European leaders and Secretary-General of the United Nations António Guterres (C) pose for a family picture during the European Union Summit at the European Union headquarters in Brussels on March 19, 2026. John Thys/AFP via Getty Images

Commentary

In response to U.S. tariffs over the past several administrations, China’s exports have been forced into new markets, including Europe. Brussels calls this an “existential” threat and second “China shock” after the first shock when China joined the World Trade Organization in 2001. The European Union is following the U.S. lead with its own tariffs focused on China, which will send Chinese exports to other regions in a cascading domino effect.