The Phoney War (aka “Drôle de guerre” in France and a “Sitzkrieg” in Germany) was a strangely quiet eight-month interval between the French and the British declaration of war against Germany on September 3, 1939, and the German invasion of France, Belgium and The Netherlands on May 10, 1940.

Here is what that means, transposed to present U.S. and E.U. relations with China.

Harsh and invectives-laden language is flying across the Pacific, while China laughs all the way to the bank with this year’s first quarter net trade income of $165 billion on its U.S. and E.U. merchandise trades.

In spite of that large transfer of wealth and technology to China, Washington keeps saying that Beijing is America’s most formidable systemic and security threat.

The E.U. Commission concurs, adding that its video summit with China’s leaders on April 1, 2022, was a “dialogue of the deaf,” and that “we could not agree on anything.” But the Europeans don’t want that to stand in the way of being China’s top trade partners.

Kudos to China

China keeps winning this trade game ever since Donald Trump vowed during his campaign speech on Staten Island in 2015 that he would stop the great “China rip-off.”

The U.S. apparently still considers its trade relations with China so important that it wants no decoupling (“divorce,” they say). No, Washington’s trade representative said on April 5, 2022, that we just want to “realign commercial ties” with China – whatever that means.

The Europeans have a simpler strategy: They are falling over each other to get a piece of China business. Germany is leading the way, with reports published last week that 70% of German companies operating in China were increasing their investments.

Reflecting those very strong trade ties, China highlights its own practice of E.U. trade with reports that during the first quarter of this year 790 freight train trips were completed to Germany from Xi'an, capital of northwest China's Shaanxi Province.

No wonder that the Germany-China business during the first three months of this year accounted for nearly one-third of the total E.U.-China trade transactions.

To round it all off, the latest data available show that the U.S. and the E.U. provide 30% of China’s entire foreign trade.

And that is a detail of particular importance at the time when Beijing wants to hold on to its current 5.5% growth forecast based on exports (emphasis added) and private consumption.

As if to make sure that Berlin and Brussels got the point, Herr Joerg Wuttke, president of the E.U. Chamber of Commerce in China took recently to the airwaves to explain: “We matter twice as much to the Chinese exporters than Chinese importers matter to us” (sic).

Things are much more serious with Russia. Toeing the party line set by Washington, the E.U. Commission says that its sanctions are intended to “destroy the Russian economy,” and that the Ukraine war must be won on the battlefield.

The beginning of a violent clash for new world order

To that end, the trans-Atlantic allies have introduced an open-ended process of devastating sanctions against Russia, with a constant flow of arms, military advisers and “volunteers” to Ukraine. They are encouraging Ukrainians to fight in order to secure better negotiating positions in chaotic and increasingly futile “peace talks” with Moscow.

Germany – headlined on this Easter Sunday as a “Despondent Colossus” by the country’s main center-right daily – worries that sanctions are boosting food and energy prices – up 8% and 44.7% respectively in the year to March – and that the worst is yet to come.

All that is stirring social unrest and political instability, squarely blamed on an “undecisive” Chancellor Olaf Scholz, with a 49% disapproval rating. Scholz is struggling to hold his coalition together under relentless attacks from Greens to implement (a suicidal) embargo on Russian energy trades, and to send more arms to Ukrainians.

It’s obvious that with those policies the German-run E.U. could not agree on anything with a self-assured China, whose leaders urged Brussels to show “independence,” “encourage genuine peace talks on Ukraine,” and “seek a sustainable European security architecture” -- instead of “adding oil to fire.”      

A grim picture indeed. The war in Ukraine is just the beginning of a violent clash for the new world order, and the belligerents – the U.S., with E.U. and Japan in tow, against Russia and China – have no concept of a modus vivendi within the framework of a U.N. charter.

The former British Prime Minister Sir Winston Churchill called a period of Europe’s precarious calm in 1939 a “Twilight War,” recalling perhaps the prescient words of Marshal Ferdinand Foch, the allied forces commander in World War I, that the peace treaty signed in Versailles on June 28, 1919, was just “an armistice for twenty years.”

We can only hope that wisdom, or, more probably, the fear of a global nuclear holocaust, will prevail over centuries’ old ethnic hatreds and racial intolerance.

Meanwhile, world trade and the international financial system will continue to fragment along the lines of regional political and security coalitions.