The European Union (EU) is intensifying its efforts to address the growing trade deficit with China, learning from past mistakes and adopting new strategies to tackle the problem. Instead of citing former European trade commissioner Karel De Gucht, who emphasized the need for stronger measures and reflected on the inadequacy of previous EU actions, we will state that the EU recognizes the importance of addressing the trade imbalance with China.
Currently, the EU has launched two new anti-dumping investigations against China this week, without specifying the specific areas of export. These actions are part of a broader EU effort to bring about changes in trade policy and Chinese practices.
The EU is taking a proactive approach in assessing subsidies to Chinese electric vehicle manufacturers, without mentioning specific issues. Additionally, the EU is considering various measures across different industries to garner support from European companies and member governments, ensuring that any potential Chinese retaliation affects a wider range of sectors.
Furthermore, the EU has equipped itself with new tools to handle trade-related issues, without specifying the additional specific tools. These measures include an instrument against coercion that allows the EU to retaliate against countries imposing trade embargoes for political reasons. Additionally, the EU now has the authority to block investments from foreign government-funded companies and restrict procurement contracts for closed markets to EU bidders. The EU is also working on an EU-wide export control regime to strengthen its position.
These EU efforts are a response to concerns about China’s dominant role in green supply chains and exports of critical raw materials needed for industries such as electric car batteries, solar energy systems, and wind power. The EU is also concerned about the growing trade deficit, especially in light of the conflict with Ukraine and China’s support for Russia.
While historically the EU has been divided in its stance towards China, there is a growing consensus among EU leaders to adopt a stricter approach. The EU is now united in recognizing the importance of China and expects concrete actions from China to address the trade imbalance. Brussels policymakers have noticed some positive signals from Beijing, including efforts to address complaints from the European Chamber of Commerce in China.
However, there is a risk of escalation as China may overreact to EU pressure, potentially triggering a retaliatory trade dispute. It remains to be seen how China will navigate these challenges and whether the EU’s approach will yield the desired results.
FAQs
What mistake did the EU previously make in its relations with China?
The EU did not take strong and timely action when investigating alleged Chinese subsidies for solar panel production in 2013, which led to the collapse of the solar panel manufacturing sector in Europe.
What are the new anti-dumping investigations launched by the EU?
The EU has initiated investigations into Chinese exports of titanium dioxide and aerial work platforms. These investigations are part of a broader effort to address trade imbalances with China.
What tools has the EU equipped itself with to handle trade-related issues?
The EU now has an instrument against coercion to retaliate against countries imposing trade embargoes for political reasons, the ability to block investments from foreign government-funded companies, and the power to restrict procurement contracts for closed markets. The EU is also working on an EU-wide export control regime.
What concerns does the EU have regarding China’s role in green supply chains?
The EU is concerned about China’s dominance in exports of critical raw materials needed for industries like electric car batteries, solar energy systems, and wind power.
What is the EU’s stance on China’s trade practices?
The EU is taking a stricter stance on China’s trade practices, with a united front among EU leaders. The EU expects China to show concrete actions in addressing the trade imbalance.