EU restates readiness to launch trade war with China over cheap imports

The EU has restated its readiness to launch a trade war with China over imports of cheap electric cars, steel and cheap solar and wind technology, with Ursula von der Leyen saying the bloc will “not waver” from protecting industries and jobs after a meeting with the Chinese president, Xi Jinping.

The European Commission chief said she was “convinced that if the competition is fair” from China, then Europe “will have thriving durable economies”.

But she said the “imbalances” caused by state support for Chinese industry leading to cut-cost products threatened jobs in Europe, and that was “a matter of great concern”.

“Europe will not waver from making tough decisions needed to protect its economy and security,” she said.

Her warning, came less than two hours after a cordial meeting at the Élysée Palace between the Chinese president and Emmanuel Macron, his French counterpart.

Xi Jinping and Macron used their opening remarks to express a mutual desire for good relations.

As “two important forces in the world” Xi said “both of us should adhere to the position of partnership, adhere to dialogue and cooperation” with “strategic collaboration” to promote “stable and healthy development” and “contribute to world peace and development”.

The EU’s more robust stance on trade with China dovetails with Washington’s approach.

The US treasury secretary, Janet Yellen, has warned China that Washington would not accept new industries being “decimated” by Chinese imports.

After the trilateral meeting, von der Leyen was blunt but insisted China had time to change direction.

She said they had an “honest and open exchange and discussion where we see eye to eye and on points where we have differences”.

Together with Macron they spoke about the geopolitical situation and how both the EU and China had a “shared interest in peace and security” with a strong role to play in relation to the war in Ukraine.

There has been repeated talk of China acting as a peace broker although it is not expected to attend a planned peace conference in Switzerland.

Von der Leyen praised Xi for the “important role” he played in “de-escalating Russia’s irresponsible nuclear threats“ and said the EU counted on China “to use all its influence on Russia” to end the war.

But it appeared on Monday that tensions on the economic front show no sign of abating with several EU investigations ongoing into China’s ability to undercut EU rivals in cars, steel, wind turbines, solar panels and medical devices.

Last September von der Leyen announced an investigation into alleged state support for the Chinese electric cars, with conglomerate BYD launching an EV last year in the EU market at under €30,000 (£25,700).

And last month the competition commissioner, Margrethe Vestager, announced the EU would use its foreign subsidies regulation to launch an inquiry into Chinese wind turbine manufacturers.

Von der Leyen said “subsidised products such as electric vehicles or, for example, steel, are flooding the European market.

“Our market is and remains open to fair competition and to investments. But it is not good for Europe if it harms our security and makes us vulnerable

“Europe cannot accept the market-distorting practices that could lead to deindustrialisation here at home,” she added.

EU manufacturers have complained that not only is the price for Chinese wind turbines up to 50% lower than homegrown ones but that they are offering authorities general terms including deferred payment schemes.

The EU has been arguing that it is the largest free market in the world and China is essentially abusing its economic hospitality by dumping product in Europe rather than damping down production or ramping up demand in China.

Beijing argues that EU manufacturers have access to an even bigger market in China and with a global demand for green tech growing everyone can flourish together.

Green tech companies have protested that while they once had a lead on producing wind turbines and solar panels they are now being put out of business by China.

Earlier on Monday, MEP Raphaël Glucksmann, the lead socialist candidate in France in the upcoming EU elections, said: “We used to have solar panel champions in France and Europe. Today, how many companies produce solar panels in France? There’s only one left.”

He also urged Macron to be firm with Xi over the plight of Uyghers in China’s Xinjiang region.