Pettis had a brilliant article on how the weakness in southern Europe feeds back onto China and the US. In short, Europe used to be close to trade neutral, with the northern countries having large surpluses and the southern countries having large deficits. If the southern countries can't have trade deficits anymore because they have no capital inflows (their budget deficits make their bonds too risky), then somewhere else in the world needs to increase their trade deficit or decrease their trade surplus - that's an immutable accounting identity.
The Euro has been weakening significantly, meaning that it's unlikely to be offset entirely by reduced northern European trade surpluses. China and Japan have been reducing their interest rates to keep their exporters strong - in effect, refusing to shoulder any of the currency adjustment. They're trying to force that adjustment onto the US, who does not actively intervene in its trade balance. Forcing us into even higher trade deficits in a period where we, too, have unemployment problems, budget problems, etc, is going to create a lot of tension and inevitably result in tariffs.
If China and Japan aren't going to allow their exporters to suffer (and structurally, they'll have a lot of trouble doing that), the only way for China to avoid very harmful US tariffs and the US to avoid a nasty trade deficit situation would be for China to buy lots of Euros, and thus force the northern European countries to balance more.
My follow up to that is that China has been burned holding sovereign bonds from Europe because the European countries are almost all fiscally irresponsible, and there aren't enough non-governmental assets to buy with those Euros. So a number of those Euros will have to go towards consumption. Increased Chinese consumptino, either from Europe or the US, has to be the end result here, but it could take a while.
My bet's still on the US tariffs (I'd prefer an 'import certificate' system that doesn't single out goods and countries/currencies to tariff, but anyway)