I think this was simply a pretext for the Europeans. When Bush invaded Iraq over their objections, they played the 'China card' on him, and by the start of his second term the Americans were forced to overhaul their policy: "The time for diplomacy is now" said Condoleeza Rice and off she went to Europe at the start of 2005. What came out of this 'diplomacy', as I see it, is that Bush agreed to work with the Europeans on the matter of Iran (hence P5 + 1), and the Europeans agreed to work with the US on China. At first, it was the embargo, but this coordination between the two has grown even to matters of Tibet, Africa, trade, etc. I think some other pretext would have been found if that one had not been provided.
On the other hand, four years one, the success of the Chinese policy regarding Taiwan is worth much much more than pleasing the Europeans.