EU warns of ‘possible’ Chinese retaliation over electric car probe

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Top EU officials have warned that an EU countervailing investigation into China’s electric car industry could trigger retaliatory measures from Beijing, even as EU ministers say the probe is crucial to upholding trade rules.

“We have to address this seriously,” EU Economic Commissioner Paolo Gentiloni told reporters at a two-day meeting of EU finance ministers in Santiago de Compostela, Spain. “I don’t think (Beijing) has a concrete reason to retaliate, but retaliation is always a possibility.”

Brussels will launch an investigation into Chinese electric vehicles over concerns they “distort” the EU market, European Commission President Ursula von der Leyen said on Wednesday, in what could become one of the biggest trade cases launched given the size of the market.

The months-long investigation, which could lead to higher tariffs on Chinese imports, is aimed at buying traditional European carmakers more time to adapt to a green transition as Chinese battery-powered models threaten to swamp growing demand market.

The move comes as the EU struggles to find a balance in its broader strategy toward China, with Brussels seeking to treat Beijing as an economic and geopolitical rival while also viewing it as a major trading partner and key trade partner for many member states. Key components. its green technology supply chain.

“We have more courage and feel that we should not shy away from fighting them on this matter. We are very confident that if China takes action, we have the strength to respond.” A senior EU official said about the internal affairs of the EU executive agency attitude expressed.

“What’s more concerning is what happens internally if China targets individual business sectors in individual countries,” the official added.

European Commission President Ursula von der Leyen delivers her State of the Union address on Wednesday
European Commission President Ursula von der Leyen announced the investigation during her annual address to EU lawmakers on Wednesday. © Julien Warnand/EPA-EFE/Shutterstock

EU Trade Commissioner Valdis Dombrovskis, who is due to travel to Beijing next week for previously scheduled talks, said the investigation would be “fact-based”.

“We have just begun a fact-based investigation, at which time we will consult broadly, including consultations with Chinese authorities and industry. We will now follow this well-established process step by step,” Dombrovskis said.

“We welcome global competition because it makes our companies stronger. But the competition must be fair. That is why engaging with China on this issue is crucial and I look forward to meeting my Chinese counterparts in Beijing next week,” he added road.

China’s Commerce Ministry on Thursday called the investigation “a naked protectionist act that will seriously disrupt and distort the global auto industry and supply chain.” . . It will have a negative impact on China-EU economic and trade relations.”

China will pay close attention to the EU’s protectionist tendencies and subsequent actions, and firmly safeguard the legitimate rights and interests of Chinese companies. “

EU finance ministers will discuss the issue in Santiago de Compostela, where reform of EU fiscal rules and the future leadership of the European Investment Bank will also be discussed.

“We just want everyone to follow the same (trade) rules, that’s all. We have nothing against China,” French Finance Minister Bruno Le Maire said when he arrived at the meeting on Friday. “The decision has been made.” . . to protect the interests of the European economy. “

German Finance Minister Christian Lindner also supported the committee’s investigation and said it was important for all countries to abide by international trade rules.

German carmakers in particular enjoy a strong position in the Chinese car market, but they have recently come under pressure from electric models produced by Chinese brands.

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