The EU’s trade and investment relationship with China is “not sustainable”, the European Commission said yesterday, vowing a stronger response as commissioners discussed how best to shield Europe’s industries from surging Chinese imports.
Commissioners were pitching ideas ahead of an EU leaders’ summit on June 18 to 19, and possible proposals could include forcing EU firms to diversify supply chains or introducing new trade mechanisms to curb China’s access to the EU market in chemicals, metals and clean energy technology.
“As economic and security interests become ever more intertwined, both dimensions will require a more robust and coherent response,” the Commission said.
Any concrete proposals for the response are not expected to be announced until the third quarter of this year.
Western governments are trying to reverse some of the offshoring to China that peaked in the early 2000s, depleting industrial know-how and hubs in their countries, particularly in the US and EU members.
The Group of Seven (G7) wealthy nations will also tackle trade imbalances and overcapacity at a mid-June summit as China increasingly flexes its dominance on rare earths and other metals that are critical for sectors including defence, tech, energy and automotive industries.
US President Donald Trump has pitched “America First” and, early this year, the EU proposed a new “Buy European” policy and RESourceEU to accelerate the development of critical mineral supply chains in the EU as well as partnerships with mineral-rich countries from Central Asia to Australia and Brazil.
China’s Foreign Ministry accused the EU on Thursday of using trade data selectively to justify claims of imbalances, and it has repeatedly threatened “strong countermeasures” should the EU adopt “Buy European” and revised tech sovereignty policies.
China rejects the notion that its trade practices are unjust.
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