European Commission Readies All Trade Tools Against China

European Commission President Ursula von der Leyen emphasized the EU’s readiness to utilize all available trade tools to safeguard its economies amidst concerns over China’s market practices.

Von der Leyen highlighted issues such as heavily subsidized Chinese products flooding European markets, underscoring the necessity for fair access reciprocity. The EU has shown a tougher stance on trade relations with China, echoing similar sentiments expressed by the U.S. Recent investigations into subsidies for Chinese electric vehicles (EVs) and other industries indicate a shift toward more stringent trade policies.

Von der Leyen mentioned the potential deployment of trade defense tools, such as the International Procurement Instrument, to address concerns over market-distorting practices. France, a proponent of the EU’s firmer approach, has called for measures to protect strategic sectors like artificial intelligence and green technology. However, concerns over trade imbalances persist, with France alone facing a significant trade deficit with China.

China has denied allegations of overcapacity and accused the EU of protectionism. Despite diplomatic efforts to address trade tensions, challenges remain. China’s anti-dumping investigation into liquor products and concerns over the impact on France’s cognac industry highlight ongoing disputes. However, both sides recognize the importance of resolving these issues to maintain stable trade relations.

Von der Leyen reiterated the EU’s commitment to fair trade practices and encouraged China to address structural overcapacities. She emphasized the mutual benefits of a level playing field while asserting the EU’s resolve to protect its economy and security interests.

Amidst diplomatic engagements, efforts to enhance trade cooperation continue. France’s pact with its auto sector aims to bolster domestic EV production while remaining open to Chinese investment. Von der Leyen and French President Emmanuel Macron also urged China to leverage its influence on global issues, such as the conflict in Ukraine and Iran’s missile proliferation.

As the EU navigates complex trade dynamics with China, ensuring fair market access and addressing trade imbalances remain key priorities. Collaborative efforts and dialogue between both parties are essential to resolving disputes and fostering mutually beneficial trade relations.