Germany and France Are Driving EU to Get Tough on Chinese Trade Jenny Leonard A joint call from France and Germany for new measures to curb Chinese imports will strengthen the European Commission’s position as it tries to rebalance trade ties with Beijing. In a paper and letter to Commission President Ursula von der Leyen, the European Union’s biggest economies proposed quicker mechanisms to protect domestic industries under threat from Chinese rivals. The most striking part of the plan is a new tool that could allow the bloc to shut down Chinese firms’ access to its $8 trillion market of traded goods and services, if needed.
While the paper doesn’t single out any country, the description of the trade practices in question almost exclusively fits China. European leaders are aiming to agree on a package of measures to control a spiraling trade deficit with China which is endangering millions of jobs across the bloc. The deficit has surged since the end of the Covid-19 pandemic and European officials say that has, in large part, been driven by unfair practices in China, such as state subsidies.
The new tool to cut off market access is intended to show that the EU is serious about rebalancing its relationship with Beijing but officials are hoping that they will never have to use it. EU Trade Commissioner Maros Sefcovic heads to Beijing later this week in an attempt to negotiate a framework to stabilize the commercial flows and avert a full-blown trade war. While the two sides are still talking about concessions the Chinese side could make to appease the Europeans, few officials are expecting any outcomes that will change the trajectory of the relationship.
The continued talks are important to manage escalation, officials said, and Sefcovic is one of the few European officials that maintain an open channel of communication to the Chinese. At the highest levels, the government-to-government dialogue has essentially been frozen and the relationship has reached a historic low point.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing