Whether to follow the US’ tariff policies tests Europe’s strategic autonomy: Global Times editorial

Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

On May 21, while attending an event in Frankfurt, Germany, US Treasury Secretary Janet Yellen claimed that “the US and Europe need to respond to China’s industrial overcapacity in a strategic and united way.” She openly urged the EU to intervene urgently to “dampen” China’s growing green technology exports, including solar panels and wind turbines. Given Germany’s staunch opposition to raising tariffs on electric vehicles related to China, it’s evident that this speech was meticulously crafted in both its location and wording.

It is clear that Yellen’s aim is to provoke trade friction between the EU and China and to bind the EU tightly to the US’ strategic agenda. In recent days, Yellen has frequently called on Europe to address “China’s industrial overcapacity,” which indirectly demonstrates the US’ weakness and anxiety in suppressing China’s new energy industry. Therefore, the US is in such urgency to bring Europe on board, hoping that Europe will “charge into battle” for it. This is essentially political coercion of the EU on economic issues.

The EU currently faces choices: whether to follow the US in taking unified actions against China or to maintain the EU’s strategic autonomy. Should it block China’s EV exports at all cost, or protect the interests of its own enterprises and maintain the globalized framework? Additionally, Europe is a pioneer in green economic development, setting an example for the world. Whether it follows the US in building green trade barriers will test its commitment to its green development agenda.

At present, Europe’s overall direction still largely maintains strategic autonomy and political sobriety. According to the South China Morning Post, European Commission President Ursula von der Leyen indicated that the EU would take “a different approach” from that of the US. German Chancellor Olaf Scholz has noted half of the EV imports from China were produced by Western manufacturers. Additionally, BMW chief Oliver Zipse previously stated that the only purpose of raising import taxes is to protect an industry, but “we don’t think that our industry needs protection.”

And a more fundamental reason is that the US cannot succeed in suppressing China’s new energy industry. The US politicizes economic and trade issues through Section 301, which is not recognized by the international community, and often imposes tariff penalties on other countries. Its behavior not only seriously violates its tariff commitments within the WTO but is also typical trade protectionist behavior that disrupts the normal order of the international market. Many countries, including European countries, have been severely affected by it. Now, the US is once again wielding the tariff stick toward an emerging industry with unlimited potential, and the outcome is self-evident.

Furthermore, Europe should recognize that China’s industrial capacity and manufacturing abilities have gradually developed during its reform and opening-up, including the economic spillover effects of opening its market to foreign investment and joint ventures. Throughout this process, many European companies have also benefited from it. The rapid development of China’s new energy industry today aligns with the global trend of energy conservation and emission reduction and is a significant contribution to global green energy efforts. From the perspective of achieving global energy conservation and emission reduction, any suppression or restriction of the new energy industry is untimely and a counterproductive move against the current trend. We believe Europe has a full understanding of this.

In fact, aside from the perspective of some in the US, China’s development and opening-up bring opportunities, not risks, to Europe and the world. The spirit of free trade is the cornerstone of the EU and the source of its economic prosperity. Protectionism will not solve EU’s problems; it hinders development and sacrifices the future. Many wise minds within the EU are well aware of this fact. China and the EU are each other’s second-largest trading partners and are both significant forces in building an open world economy. Washington often mentions its “European friends.” It is hoped that they will respect the EU’s vital interests and also uphold the right of the EU and other countries to develop independently and autonomously.

European leaders coming to China to seek cooperation expansion amid decreasing bilateral trade

An aerial drone photo taken on Jan. 16, 2024 shows vehicles at a terminal of Dalian Port, northeast China's Liaoning Province. Dalian Port achieved a record-breaking annual export of 102,773 vehicles in 2023, marking a year-on-year growth of 143 percent, according to the Dalian Customs.(Photo: Xinhua)

An aerial drone photo taken on Jan. 16, 2024 shows vehicles at a terminal of Dalian Port, northeast China’s Liaoning Province. Dalian Port achieved a record-breaking annual export of 102,773 vehicles in 2023, marking a year-on-year growth of 143 percent, according to the Dalian Customs. Photo: Xinhua

After senior officials from the Netherlands and France visited China, other European leaders are following suit, which analysts said is aimed at seeking cooperation expansion with China amid the EU’s internal economic problems and decreasing bilateral trade with one of its most important trade partners.

China’s foreign trade with the EU stood at 1.27 trillion yuan ($176 billion) in the first quarter of 2024, down 3.5 percent year-on-year, at a time when China’s total imports and exports grew 5 percent, the fastest pace in six quarters, to hit a record of more than 10 trillion yuan, according to statistics released by the General Administration of Customs of China on Friday.

China was the largest partner for EU imports of goods – accounting for 20.5 percent – and the third largest partner for EU exports of goods in 2023, data from the EU’s statistical office showed.

Analysts noted that European countries are seeking to expand cooperation with China, especially in high-end manufacturing, and maintain pragmatic economic and trade cooperation in general, at a time when most EU member states are facing weak economic growth, insufficient impetus for technological innovation and the spillover effects of the Russia-Ukraine conflict.

According to a survey by the European Central Bank (ECB) of the bloc’s biggest firms released on Friday, the eurozone economy is making a timid and incomplete recovery, driven by higher spending, but is being held back by sluggish investment and labor demand.

Another ECB survey also released on Friday forecast GDP growth of just 0.5 percent for 2024, after the EU’s economy had already stagnated for about a year and a half. Compared with the previous survey in the fourth quarter of 2023, the figure represents a small downward and upward revision of 0.1 percentage points for 2024, read the ECB survey.

The EU is currently under big pressure. European leaders’ visits and planned visits to China are aimed at bringing about more engagement and promoting its economic development through economic and trade cooperation with China, Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Friday.

“If the EU only engages in geopolitics, it will actually pay for the US in the end. As a result, the EU’s own economy is in ruins, and so is the well-being of its people,” said Hu.

At the invitation of Chinese Premier Li Qiang, German Chancellor Olaf Scholz will pay an official visit to China from Sunday to April 16, the Chinese Foreign Ministry announced on Friday.

Italian Prime Minister Giorgia Meloni will travel to China in the coming months, Bloomberg reported on Friday, citing a person familiar with the plans.

On Thursday, Chinese Minister of Commerce Wang Wentao met Italy’s Deputy Prime Minister and Minister of Foreign Affairs Antonio Tajani in Verona, Italy. Wang vowed to further cultivate China-Italy relations, and hopes Italy will play a role in calling on the EU to take a rational and open-minded attitude to new energy cooperation with China.

Dutch Prime Minister Mark Rutte paid a working visit to China from March 26 to 27, at a time when the Netherlands’ chip export policy was in the spotlight.

Despite internal economic problems, the EU is also facing outside pressure, analysts pointed out.

Due to pressure from the US, some European countries eventually yielded to the superpower, which damaged their bilateral economic and trade cooperation with China, Zhao Junjie, a research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times.

Analysts also criticized the US for using long-arm jurisdiction to force its allies to become foot soldiers in its containment and “decoupling” strategy against China.

China’s anti-dumping probe into EU brandy doesn’t target any member: commerce minister

China EU Photo:VCG

China EU Photo:VCG

Chinese Commerce Minister Wang Wentao said on Monday in France that China’s anti-dumping investigation into brandy imported from the EU does not target any specific EU countries nor carry predefined findings, as China and the EU have strengthened communication recently to clear the clouds hanging over bilateral economic and trade cooperation.

Analysts said that China’s anti-dumping probe into the brandy imports is fundamentally different from the EU’s politically motivated anti-subsidy investigations into Chinese electric vehicles (EVs).

They urged the EU to increase its strategic independence and join hands with China to appropriately deal with disagreements through dialogue for the benefit of both sides as well as global economic growth.

The anti-dumping investigation was prompted by a complaint submitted by China’s brandy industry, Wang said when meeting with three French brandy trade associations and five French brandy producers in Paris, according to a statement on the Ministry of Commerce (MOFCOM) website.

China will conduct the investigation openly and transparently in accordance with Chinese law and WTO rules, while fully safeguarding the rights of all stakeholders, the minister said.

Wang’s remarks came as Western media outlets hyped the Chinese move as a tit-for-tat countermeasure to the EU’s anti-subsidy investigations into Chinese EVs.

“The EU’s protectionist move is purely a political decision by the European Commission, which is groundless and violates WTO rules,” Zhang Jian, vice president of the China Institutes of Contemporary International Relations, told the Global Times on Tuesday.

Zhang blasted some European politicians – under pressure from the US – who advocate “de-risking” against China, resulting in serious disruptions to normal China-EU economic and trade cooperation.

Amid the global trade slowdown and other factors, China-EU trade in goods slipped 7.1 percent year-on-year to reach $783 billion in 2023, according to data released by China’s General Administration of Customs.

However, recent frequent exchanges between senior Chinese and European officials have sent a positive signal of deepening China-EU economic and trade development, Yang Chengyu, an associate research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

According to Western media reports, German Chancellor Olaf Scholz will visit China in mid-April with a business delegation. Some leading German companies confirmed to the Global Times the participation of their CEOs in the delegation.

As economic and trade relations remain a ballast stone for China-EU relations, deepening pragmatic cooperation in more sectors conforms to both sides’ interests, according to Yang.

“The EU is pursuing a green and digital transition, while China has notable production capacity advantages in these areas. Thus, increased economic and trade cooperation will contribute to the bloc’s development and prosperity,” Yang said, noting that “de-risking” will risk losing opportunities from the huge China market.

Wang met members of the French business community including Airbus CEO Guillaume Faury and BNP Paribas Chairman Jean Lemierre. During the meetings, the French companies said that they are firmly positive about China’s economic prospects and business environment, with commitments to long-term development in the market, according to a separate statement on the Chinese Commerce Ministry’s website.

Along with China’s high-level opening-up, European companies have rapidly increased investment in the market for greater opportunities. Volkswagen has established its largest overseas research and development (R&D) center in North China’s Tianjin. 

Valeo has announced plans to build a comfort and driving assistance systems manufacturing and R&D site in Shanghai. AstraZeneca will invest $475 million to build a small molecule drug factory in Wuxi, East China’s Jiangsu Province.

During Wang’s meetings with French officials and business executives in Paris, he stressed that China is promoting high-quality development and accelerating the development of new quality productive forces so as to create a fair competition environment for domestic and foreign enterprises, providing wider opportunities for European companies, including those from France.

China is willing to join hands with France to give play to existing economic and trade mechanisms to appropriately control disagreements through dialogue and cooperation and strengthen efforts to address each other’s reasonable key concerns, Wang said.

It’s normal that China and the EU have disagreements, experts said. With understanding and consensus, the two sides will be able to appropriately deal with these disagreements and boost China-EU economic and trade cooperation to a direction that benefits both sides, Zhang said, expressing optimism for the prospects of bilateral trade cooperation.