Despite ongoing talks to rebalance EU-China trade, Brussels is preparing a powerful new tool to shield its market from a surge of cheap Chinese imports.
China’s ambassador to the EU, Cai Run, threatened on Thursday to retaliate if the EU adopted unilateral measures against Chinese interests.
The statement came as the European Commission is working on a new trade defence tool, dubbed a “kill-switch,” that could cut off Chinese access to the EU market in the event of serious market disruption caused by its aggressive trade policies.
“China opposes politicising economic and trade issues, overstretching the concept of security, and resorting to unilateral or maximum pressure,” Cai said.
He added: “If the EU side insists on adopting restrictive and discriminatory measures against China, China will have to take countermeasures to firmly safeguard its interests.”
As the EU faces a record-high trade deficit with China of €1 billion a day, Brussels is seeking to protect its market from low-cost Chinese imports, which have surged by 25% over the past year
Last October, EU leaders tasked the European Commission with developing an instrument that could be rapidly deployed against countries whose political or economic actions have serious repercussions for the EU market.
Franco-German move
EU Trade Commissioner Maroš Šefčovič told MEPs on Wednesday that the tool should be presented by the end of the year and would allow the EU “to react much faster, even by limiting the exports into the European Union.” He added that it would target “countries which are treating us [the EU] unfairly or which are harming European interests.”
Presented as country-agnostic, the tool would nevertheless directly target Chinese interests, which rely heavily on the EU’s 450 million consumers to sell their excess of production.
France and Germany pushed for such an instrument in early October, as every EU member state now faces a trade deficit with Beijing, with Chinese imports threatening entire sectors of their industries.
The Franco-German move came amid ongoing negotiations between Brussels and Beijing, which had begun the previous June with the aim of rebalancing trade relations. It also came just days before the Commission reached a deal on 9 October to reduce Chinese imports of hybrid cars into the EU.
Since the deal on cars, talks have resumed at a technical level between EU and Chinese officials, with Brussels hoping to replicate such an agreement in other sectors. A new meeting between Šefčovič and China’s Commerce Minister Wang Wentao is scheduled for March 2027.
Given the urgency of the situation, EU leaders have also asked the Commission to adopt measures, including quotas and tariffs, against Chinese imports in the chemicals and machinery industries, as pressure on the EU market has become unsustainable for European producers.
Šefčovič has repeatedly said that, with thousands of jobs at stake in the EU, the EU-China trade issue had become a political one in Europe, with high expectations among EU citizens.
Despite ongoing talks with China since June, the Commission has continued to impose additional duties on Chinese imports entering the EU following investigations product by product that found Chinese producers were benefiting from unfair pricing or subsidies from China.
This is not the first time China has threatened the EU with countermeasures. It already did so against a bill – the Industrial Accelerator Act – currently under discussion by the EU’s co-legislators seeking to limit access to EU public procurement and impose strict conditions on investments in the EU market, also targeting Beijing without explicitly naming it.
Source: www.euronews.com
