Brussels (Brussels Morning) – China’s President Xi Jinping congratulated incoming European Council President Antonio Costa, emphasizing China-EU relations as the EU imposes import tariffs on Chinese electric vehicles, potentially igniting a new trade war front.
China’s President Xi Jinping congratulated incoming European Council President Antonio Costa, Chinese state media stated, a few hours before European Commission curbs on Chinese electric cars are planned to take effect. The Commission is imposed to confirm provisional import tariffs of up to 37.6 per cent on Chinese-manufactured electric vehicles (EVs) after the union blamed the world’s no 2 economy for delivering its firms with heavy state subsidies.
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Xi stated he “attaches great significance to the development of China-EU relations” as Europe braces for retaliatory actions from Beijing and the possible beginning of a new front in the West’s tariff war with the $18.6 trillion economy. EU trade policy has shifted increasingly defensive over situations that China’s production-focused development model could see it flooded with inexpensive goods as Chinese firms look to step up exports amid feeble domestic demand.
China and the European Commission have been in talks since last week over the curbs that Beijing and some European automakers want discarded. Beijing rejects indictments that Chinese EVs are unfairly subsidised. Xi expressed China “is committed to developing the China-EU comprehensive strategic partnership,” according to the report. “China has always regarded Europe as an important pole in the multipolar order,” he said.
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It will fall to Costa, a former Portuguese PM, to discover a common cause among the Council’s 27 member states, as they linger over whether to back the Commission on the EV tariffs in an advisory vote in the coming weeks. Germany, whose carmakers produced a third of their sales last year in China, reportedly wants to eliminate the tariffs, while France has been among the firmest backers. China is currently embarking on an anti-dumping probe into European brandy imports. Chinese customs data indicates that almost all EU brandy exports to China arrived from France last year.
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Beijing has also extended an anti-dumping investigation into imports of European pork and its by-products, which critics say is aimed at pressuring Spain, the Netherlands and Denmark to split with the Commission over the curbs.
The EU and China are significant economic partners. However, the EU’s trade deficit with China is nearly €400 billion. The EU therefore emphasised to China the importance of reaching a more balanced economic relationship with a level playing field and interchange. The EU expects China to take more substantial action to improve market access and the investment environment for EU investors and exporters. The EU seeks to strengthen resilience by addressing necessary dependencies in specific sectors, in full adherence with the World Trade Organization rules.
