![Faced with Chinese dumping, Europe protects itself less than the United States Faced with Chinese dumping, Europe protects itself less than the United States](https://media.lesechos.com/api/v1/images/view/66436245624038572022b08b/1280x720/01101037311539-web-tete.jpg)
The increase in American customs duties on several key Chinese products resonates loudly in Brussels, where, in recent months, the EU has never been so offensive against Beijing, accused of unfair competition and dumping.
After having hesitated for a long time to crack down on China, the EU has changed gear. It is now determined to act against Beijing’s massive public aid to its companies, which distorts the market and weakens European industry by flooding it with Chinese products at cut prices.
Today, Brussels’ concerns mainly relate to its green technologies. But in the future, it is the European industrial sector as a whole which will be affected by Chinese production “overcapacity”.
The European response took the form of several laws which gave rise to as many commercial defense instruments.
They resulted in the opening of a series of investigations into subsidies for electric vehicles manufactured in China, as well as in the wind energy, solar energy and railway sectors.
Another investigation is underway into medical equipment from China, suspected of favoring its own companies. And that would only be the beginning…
Economic security
All are part of a new, more global European economic security strategy which leads the EU to better control its exports, filter its outgoing or incoming investments, or even better monitor its critical technologies.
Some have already produced their effects: risking being excluded from calls for tender in solar and rail, the Chinese companies concerned ended up withdrawing on their own. The EU therefore closed these investigations.
Now, all eyes are on the one that makes the Chinese the most nervous: that on electric vehicles, which could give rise to sanctions before the summer.
The Commission could go so far as to apply preventive and temporary customs duties – which could become permanent – in retaliation for Chinese subsidies.
Will it crack down like Joe Biden did? Nothing is less sure. “Europe’s intention is to develop a doctrine of economic security and not economic protectionism like the American approach,” judges Elvire Fabry, researcher at the Jacques Delors Institute.
“The EU could increase its customs duties to 15% or even 30% (compared to 10% today) which would undoubtedly have the effect of attenuating the comparative advantage of imported Chinese vehicles, but not of resolving the problem. As a recent study by Rhodium Group showed, even a rate of 50% would still not be sufficiently dissuasive for the Chinese,” continues the expert.
Moreover, the decision could push the Chinese to install more factories in Europe, as they have already started to do, to avoid having to pay customs duties…
Trade war
If the equation is not simple for the EU, it is also because certain Member States, first and foremost Germany, are very exposed to the Chinese market and are curbing any desire for a European response for fear of commercial reprisals. .
China has already shown that it will not let this happen. After the EU’s anti-subsidy investigation against its electric vehicles, Beijing opened an anti-dumping investigation into spirits, such as cognac, imported from the EU.
Above all, Brussels fears that Beijing will cut off its access to certain raw materials or strategic technologies. In December, China caused a sensation by taking the decision to ban the export of technologies for the extraction, processing and smelting of rare earths, metals essential to defense, low-carbon technologies and the manufacture of smartphones.
In this battle, the EU can nevertheless rely on the strength of its market and its 450 million consumers from whom China cannot completely cut itself off.
The balance of power between the two blocs has become very harsh. And the electoral context on both sides of the Atlantic also strongly contributed to exacerbating reactions to the point that today the hypothesis of a trade war is no longer excluded.