Tariffs are bad for Europe. Drawing closer to China isn’t a magic bullet.

Europe is limping into the trade fight launched by President Trump with zero growth, high debt and political turbulence in its major economies. As the continent’s biggest trading partner—the U.S.—turns hostile, some policymakers here want to double down on Europe’s relationship with China.

That could come at a steep price—including, potentially, the loss of Europe’s storied auto industry, analysts say.

European manufacturers are facing a nightmare scenario of 20% reciprocal tariffs on exports to the U.S., potentially stacked on top of 25% auto and other tariffs. So in some ways, China is an attractive fallback option.

Europe trades nearly as much with China, the world’s No. 2 economy, as it does with the U.S. Notwithstanding recent wobbles, Chinese economic growth is still racier than America’s, at least according to official data.

For its part, China, with its weakening economy and a business model geared toward exports, has been eager to secure better access to the European Union’s single market—one of the world’s largest and richest. Nations in the global south, which China has been courting, don’t have the scale to replace the U.S. and Europe. Beijing might also relish the chance to drive a wedge between the U.S. and its NATO partners.

European and Chinese officials have publicly flirted with the idea during a flurry of recent high-level exchanges. Last week, China’s Vice Premier He Lifeng told European trade commissioner Maros Sefcovic in Beijing that China was willing to work with the EU to resist protectionism, according to the state-run Xinhua News Agency. “China is a vital trading partner,” with whom there is “room to engage constructively,” European Commission President Ursula von der Leyen told EU ambassadors in February.

In a trade fight with America, Europeans may have more to lose. European businesses have thinner profit margins, making them less able to absorb tariffs. In the U.S., average operating margins have increased from 12.5% to 14.3% over the past decade, while in Europe they have increased from 9.7% to 11.2%, the difference resulting from stronger innovation in the U.S., a more favorable regulatory environment and stronger global market expansion, according to Allianz.

If both the U.S. and the EU were to apply 25% import tariffs, that would knock 1 percentage point off the eurozone’s economic growth over the next two years, and 0.8 percentage point off U.S. growth, according to Allianz. That is something that the export-oriented bloc can ill afford with its large industrial sector already mired in recession, while America’s economy is growing at an annual 3% rate.

However, any trade deal with China would hold risks for Europe.

The U.S. holds a special place in the world economy because it buys much more from the world than it sells to it. Americans are the world’s consumers of last resort, helping to balance out vast trade surpluses in places like China and Europe that do the reverse: sell more to other countries than they buy.

Chinese manufacturers, wrestling with overcapacity in some sectors, have recently flooded global markets with cheap goods and started competing aggressively with American and European businesses around the world. China’s surplus with the world overall was just shy of $1 trillion last year, three times its size in 2018. The EU last month unveiled plans to protect its steel and aluminum producers from global overcapacity, pointing to rising exports from China and increasing trade barriers in key markets like the U.S.

China’s exports to the EU exceeded imports from the bloc by over 300 billion euros, equivalent to almost $332 billion, in 2024, according to EU data, a gap that is roughly twice as large as when Trump first started imposing tariffs in 2018. The EU has highlighted that burgeoning trade deficit as problematic even as it has defended its large goods surpluses with the U.S.

For European businesses, even with a new trade deal that lowers barriers to entry, it isn’t clear that they could significantly increase exports to China.

“China exports, it doesn’t import,” said Brad Setser, senior fellow at the Council on Foreign Relations. “If Europe wants to do a deal with China, it has to be prepared to kiss its auto industry goodbye.”

As the trade confrontation between the U.S. and China escalates, Chinese companies will come under increased pressure to dump their excess production in Europe, further increasing the competitive pressure on the continent.

“These goods showing up in Europe could have both a deflationary and a contractionary impact because they would crowd out local products,” European Central Bank executive board member Piero Cipollone said in a February interview published on the ECB’s website.

What would an EU-China trade deal look like? Analysts say it could build on an agreement signed by the two blocs in late 2020 but frozen five months later amid tit-for-tat sanctions over Beijing’s treatment of its Uyghur population in Xinjiang province.

China has changed since then. Its businesses rapidly scaled the value chain during the Covid-19 pandemic and are now producing high-value engineering goods in green technologies and electric vehicles.

Given those advances, European officials might seek to encourage Chinese companies to build factories in Europe and share their know-how with the Europeans, especially in green technologies, said Noah Barkin, senior adviser with Rhodium Group in Berlin.

That would be a reversal of China’s opening to the West in recent decades, when it was American and European companies investing and sharing technologies with China.

European officials have largely welcomed recent Chinese greenfield investments. Those have included battery makers such as CATL, EV manufacturers such as BYD in Hungary and Chery Automobile in Spain. But while some European officials thought tariffs on Chinese auto manufacturers would force them to produce more in Europe, that hasn’t really taken off at scale yet, said Barkin.

The Chinese are investing heavily in countries on Europe’s edge, such as Turkey and Morocco, places that have free-trade agreements with the EU but are outside the bloc, he said. China is still shipping most goods it sells in Europe from back home.

There are obvious political barriers to an EU-China deal too. The EU remains deeply concerned about China’s support for Russia’s war in Ukraine, something that China has shown no willingness to change.

The EU’s readout of its exchange with China last week was notably cooler than Beijing’s. “We need to tangibly rebalance our trade and investment relations,” Sefcovic, the EU trade commissioner, wrote on X.

Nor is it clear that China would give priority to a deal with Europe. Beijing recently installed a hard-line diplomat and ex-ambassador to France, Lu Shaye, as a key liaison with the EU. That is a sign that China isn’t in a compromising mood and will play hardball with the EU, analysts said. Lu earned a reputation for making frequent combative statements during his five-year tenure as Beijing’s envoy to Paris.

The U.S. remains priority number one for China, analysts say, and as long as Beijing thinks Trump is interested in doing a deal, it will focus its energies there.

In fact, there is a chance that U.S. tariffs might drive Europe closer to America. Europe might commit to buy more liquefied natural gas and defense equipment from the U.S. to reduce its trade surplus. Higher U.S. tariffs would likely shift some European production across the Atlantic, something that Trump has said he wants to see.

In Germany, a significant minority of engineering businesses—a key export sector—say that U.S. import tariffs are unproblematic or might help them because they see China as their primary threat, said Andrew Adair, an official with the German Mechanical Engineering Industry Association, a lobby group.

“Some members say that a punitive [U.S.] tariff on China would help us to shore up our position,” Adair said.

Write to Tom Fairless at tom.fairless@wsj.com