the trade war between Europe and China

During her State of the Union speech on Wednesday September 13, Ursula Von der Leyen announced the opening of an investigation into the subsidies granted by Beijing to its auto manufacturers in the name of competition rules, without excluding Sanctions. Two days later, China warns of what it calls “the negative impact” of the European initiative.

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The Chinese authorities denounce an “openly protectionist” measure. The word is out. The Chinese Ministry of Foreign Trade cites economic and commercial relations between the Middle Kingdom and Europe. Implied, if the European Union carries out the threats made by the President of the Brussels Commission, we will dig up the hatchet.

Ursula Von der Leyen targets subsidies deemed anti-competitive which have allowed Chinese groups to flood the global, and therefore European, market at artificially low prices. Europe has not forgotten how its industry has been undermined by the issue of low-cost Chinese solar panels. She does not want to repeat the experience with electric cars.

European counter-offensive

The European Commission would take inspiration from what the United States is doing. Washington imposes a 28% tax on Chinese car imports. Today, Europe is limited to 10%. The goal would therefore be to increase this tax, but the idea divides even on European soil because not everyone has the same commercial interests.

France is campaigning for a Europe that asserts itself more in the face of Chinese practices when other countries in the Union, such as powerful Germany, fear offending Beijing. The Chinese market is essential for the German automobile industry and alienating the Chinese authorities would be very dangerous for Berlin. This is where the file stands, a face-to-face between dozens of innovative Chinese brands which compete with foreign manufacturers, including Europeans, who are having difficulty adapting.