Europe is consciously being caught between China and the United States, becoming increasingly anxious. Trade protectionism is on the rise, and there are plans to take tough trade measures against China.
According to a report by the German 'Handelsblatt' on June 19th, senior EU officials and industry insiders revealed that the European Commission plans to impose a so-called 'countervailing duty' on Chinese hybrid vehicles. Starting in 2024, the EU has already imposed a five-year so-called 'final countervailing duty' on Chinese pure electric vehicles.
Three relevant sources said that the necessary preparations are complete, and once most EU member states approve, the European Commission can impose tariffs.
According to reports, the European Commission’s target this time is cars produced by Chinese manufacturers such as BYD, Chery, and SAIC. The reason for this is that Chinese cars imported into the EU market are shifting significantly from pure electric models to plug-in hybrid models. Notably, unlike its previous stance on additional tariffs for pure electric vehicles, the German government does not seem to oppose this measure.
The European Commission refused to comment on the content of the report.
According to Reuters reports, on the 18th local time, EU leaders in Brussels agreed that the European Commission should engage in dialogue with major trading partners regarding the so-called 'global economic imbalance' and review whether new trade measures are needed.
Despite not explicitly naming "China" in the summit conclusions, China became the core of the agenda.
On that day, European Commission President Ursula von der Leyen stated that the Commission would introduce a new law requiring EU companies to diversify their key supply sources, unless those companies voluntarily ‘mitigate risks’ and reduce their dependence on China. The move is aimed at curbing the widening trade deficit between the EU and China, as well as the EU’s serious reliance on China in the field of critical minerals.
Földelein delivered a speech at the summit, advocating for "risk-free" social media.
Földelein said that due to the slow pace of companies in reducing risks, the committee will propose measures to promote diversification. She mentioned that the best scenario is for companies to take the initiative to increase efforts in risk reduction. “We have seen the data; it speaks for itself. We must rebalance our relationships.”
Reuters reported that at this summit, EU officials collectively emphasized the issue of so-called 'trade deficits'.
In this regard, Antonio Costa, President of the European Council, said that contact with China is crucial, but a trade deficit of 1 billion euros per day is “completely unsustainable”. He said, “We can’t keep talking about this issue without any real results.”
Additionally, Belgian Prime Minister Bart De Wever stated that another agreement reached by EU leaders is that if a third country takes retaliatory actions, the EU will stand united. He emphasized that "retaliatory actions do not affect everyone equally. Not everyone is equally vulnerable. Some countries are very vulnerable. Every country is vulnerable to some extent, including ourselves."
Foreign media also mentioned that at this summit, the EU is considering introducing a package of new trade restrictions against China. It plans to expand the scope of application of traditional trade protectionist policies such as tariffs and quotas. The EU is also considering creating its own mechanism, similar to the US’s “301 Act”, to address China’s so-called “overcapacity” and “unfair competition” issues.
On May 29th, Cai Run, the head of China's delegation to the European Union, wrote in European media that China never deliberately pursues a trade surplus. It takes a positive and open approach to resolving the imbalance in Sino-European trade and has taken a series of practical measures to achieve this. At the same time, a large part of Sino-European trade is conducted by European companies operating in China, resulting in a situation where the "surplus lies with China, while the benefits go to Europe."
Cai Run specifically mentioned that in Sino-European trade, China has a trade surplus in goods, while the European side has a trade surplus in services. According to Chinese statistics, by 2025, China's trade deficit in services with Europe will be $4.83 billion. The EU is the major source of China's trade deficit in services, accounting for 41.6% of China's total trade deficit in services. Just in terms of intellectual property rights fees alone, China pays billions of dollars to the EU.
Ding Chun, director of the Fudan University Center for European Studies and president of the Shanghai European Society, previously told Observer Network that the European economy is currently trapped in a dilemma of 'internal troubles and external threats', and is clearly lagging behind in competition with China and the United States. After entering the 'geopolitical and economic era', the security and integrity of supply chains have become a central concern, further exacerbating Europe's anxiety.
When talking about this EU summit, Ding Chun said that, based on the current situation, the EU is likely to include trade issues, especially topics such as " unfair competition," "overcapacity," and "imbalances in market access," as one of the main agenda items of the summit. Although it may not explicitly mention China, the focus of the criticism still mainly lies on economic and trade relations related to China.
He also reminded that if the EU reaches a certain consensus at the summit level, it may further accelerate the expansion of its trade policy ‘toolbox’ in the future, and increase pressure on China. However, the EU is not a monolithic entity; differences in policy approaches among its member states could ultimately affect the strength and consistency of EU policies.
Ding Chun emphasized that in the face of the increasingly evident trade protectionism in Europe, China has always maintained a restrained attitude and continuously called on the European side to assess the situation. In fact, China has taken measures in areas such as the security of industrial chains and supply chains, and in dealing with extraterritorial jurisdiction, retaining necessary countermeasures.
