EU has itself to blame for trade disputes with China

Illustration: Liu Rui/GT

Recently the European Union's top diplomat Josep Borrell warned that a trade war between the EU and China may be "unavoidable." He stated: "We must not be naive, we have no interest to get into a trade war… but maybe it's unavoidable, it's also in the logic of things." 

The comments come amid China launching an anti-subsidy investigation into European dairy exports. The probe is widely seen as a countermeasure against politically motivated EU tariffs targeting Chinese electric vehicles, as well as half a dozen other probes targeting various Chinese exports. The bottom line is if a trade war breaks out between China and Europe, the EU, chiefly the European Commission, only has itself to blame.

Starting in 2022, the European Commission under Ursula von der Leyden took an aggressive pro-American and transaltanticist turn in their foreign policy and began to upend the traditional EU position of seeking balance and prudence in its relationship with China. It disregarded the previously agreed China-Europe Comprehensive Agreement on Investment (CAI) and declared an agenda of "de-risking" with China. 

Gone were the days when Europe negotiated mutually acceptable compromises and "win-win" cooperation with China, and in came a new form of veiled antagonism that sought to more closely follow the US. 

In doing so, the Commission immediately began accusing China of undermining European interests and the "rules-based order" in trade by "flooding" European markets with cheap subsidized Chinese products, namely electric vehicles among others, callously ignoring the reality that China is in fact the largest export market for scores of European products and many EU economies are reliant on it. This, of course, comes on the back of European policies having already severely damaged the competitiveness of member states through its energy policies and forced decoupling with Russia, which has led to severe inflation and "deindustrialization" for the benefit of the US.

Thus, the Commission has been quick to accuse China of undermining European business by providing surplus exports of affordable electric vehicles, despite the EU having taken its climate goals very seriously amid a huge push for a renewable transition. 

It has been a frequent theme of Western countries to demand a massive expansion in renewables, for China to meet their demand and then for the given country to accuse China of "unfair trading practices." 

We need to ask ourselves, is the European Union capable of meeting its own demand for EVs in terms of manufacturing capacity? Moreover, if Chinese firms were excluded from their market, could their consumers readily afford the scarcely available alternatives? 

The answer is no and no. China is exporting to Europe not because of this "overcapacity" narrative being pushed by the US and its allies, but because the demand exists. China is able to meet the world's electric vehicle demands at a fair practice, creating high-quality, competitive products but, due to the interests of geopolitics, it is now being punished for it. 

On the consideration of the EU, this is a massive goal that fails to appreciate how the commission itself is becoming the biggest advocate of destroying European industry and business in the pursuit of US-centric foreign policy goals. It goes without saying that should the EU continue its unreasonable protectionism and aggression against China, it has a great deal to lose.

The interest of the European Union should continue to vest itself in a balanced, fair and cool-headed relationship with China. China has never ignored the EU's call for market access and deeper trade relations with the continent which benefit its businesses. This is why the CAI treaty existed in the first place. 

However, the main problem the EU faces is pro-American elements who want to sabotage European relations with China accordingly and do not seek trade integration, but confrontation, which is precisely why this treaty never materialized. This is destroying EU interests and prosperity for the sole benefit of another third party. 

The EU now finds itself in a situation where if it's a trade war they want, it's a trade war they will get. They are the sole agitators of trade issues with China, choosing to politicize commercial issues with little plan as to how they will gain from it. 

If the EU wants to prevent this outcome, they should stop politicizing trade and recognize that EU consumers ultimately benefit from affordable Chinese goods that their own manufacturing base is not able to provide.

The author is a political and historical relations analyst. [email protected]

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