China Says EU Bears Full Blame, as Concerns Grow Over Potential Trade Row

By Wang Cong, Ma Tong and Yin Yeping

Jun 21, 2024 10:20 PM

Illustration: Chen Xia/Global Times

China's Ministry of Commerce (MOFCOM) said on Friday that the EU side bears full responsibility, as it continuously escalates trade frictions with China, which could trigger a "trade war," in response to media reports of various industries in the EU expressing worries about escalating trade tensions potentially prompting a "trade war." 

New information obtained by the Global Times offered a detailed account of how the European Commission (EC), the executive body of the EU, carried out the so-called anti-subsidy probe into Chinese electric vehicles (EVs) in an extraordinarily unfair and opaque manner and deliberately provoked a bruising trade row with China, while completely disregarding the Chinese side's sincerity in engaging in consultations.

The EC's investigation and its subsequent announcement of additional tariffs on Chinese EVs have caused serious concerns among many in the EU of a dangerous downward spiral in bilateral trade ties, with some asking EU leaders to consider the consequences. Meanwhile, Chinese experts said that a trade row with China would further hurt the EU's already troubled economy and hamper its green transition.

In response to media reports suggesting that China's anti-dumping probe into certain pork and pig by-products originating from the EU is a countermeasure against the EC's announcement of tariffs on Chinese EVs and that various industries in the EU are worried that trade frictions will escalate and may trigger a "trade war," a spokesperson for MOFCOM stressed that the current trade friction between China and the EU is not what the Chinese side wanted to see.

"Regrettably, the EU continues to provoke trade disputes," the spokesperson said, noting that in 2024 alone, the EU introduced 31 trade and investment restrictions on China, including 25 trade remedy measures, seriously undermining China-EU economic and trade cooperation. "The EU continues to escalate trade frictions, which could trigger a 'trade war'. The responsibility lies entirely with the EU."

The spokesperson further stated that the EU has failed to implement consensuses reached by leaders of the two sides. President Xi Jinping has stressed on multiple occasions that the two sides need to strengthen strategic communication, and increase understanding and properly handle differences through constructive dialogue. EU leaders have also expressed agreement and hope to strengthen exchanges and dialogue with China and carry out more mutually beneficial cooperation, according to the spokesperson.

However, "in its anti-subsidy investigation, the EU ignored the important consensus reached by the leaders of both sides, ignored the objective facts, and ignored China's repeated solemn representations. It predetermined the results of the investigation, issued inappropriate tariff rates, harmed the interests of businesses from both sides, undermined the overall China-EU economic and trade cooperation, and affected global cooperation on climate change," the spokesperson said, "the EU side's approach is typical protectionism, and China's determination to safeguard its legitimate rights and interests is unwavering."

Deliberate attempt to stir tensions

The sharply worded remarks from the MOFCOM also came as new information obtained by the Global Times offered a detailed account of how the EC carried out the so-called anti-subsidy investigation against Chinese EVs in an extraordinarily unfair and opaque manner, completely disregarded the Chinese side's efforts to engage in friendly consultations, and imposed excessive restrictions on trade and investment related to China.

Contrary to WTO rules, EC president Ursula von der Leyen announced the so-called anti-subsidy investigation during her annual State of the European Union address in September 2023 without notifying the Chinese side in advance, essentially launching a "surprise attack" on Chinese industries. The EC carried out consultations before filing the case as a mere formality, initially giving the Chinese side only one working day for preparations, according to the new information obtained by the Global Times.

In stark contrast to the EC's deliberately hostile approach, the Chinese side showed the utmost sincerity in seeking to resolve disputes through consultations. In addition to remarks from top leaders, the MOFCOM also proactively sought to engage with the EU side, as it tried to strengthen communication with EU institutions and clarify its stance. At the senior level, there were more than 10 rounds of communication with the EU side, and there were also more than 50 communications with EU members and key businesses on various occasions at the senior level, including visits and meetings, the information showed.

The investigation process was also filled with unfair and opaque practices. The EC deliberately excluded the EU's biggest EV exporter, Tesla, in sampling without providing any reasonable explanation, but instead focused on Chinese firms, namely SAIC Motor, Geely and BYD.

The EC also made unreasonable demands on Chinese firms to turn over sensitive information, including battery formulations, production costs, financing and suppliers. 

Ultimately, the information revealed that the EC was deliberately trying to pick up a trade row with China, which led to growing concerns among EU industries about a potential "trade war," which would have profound implications for EU businesses and consumers, experts said.

"If the trade dispute between the two sides escalates, it will have an adverse impact on European companies and consumers. European businesses and some research institutions have seen this, so they are worried about it," Gao Lingyun, a trade expert at the Chinese Academy of Social Sciences, told the Global Times on Friday. 

Gao said that amid such concerns, EU industries and businesses should urge EU trade policymakers to heed their calls and resolve the dispute between the two sides through consultations. 

Many within the EU have also warned of serious consequences from a potential trade row and slammed the EC's claims of overcapacity in China's EV industry. 

"Let us remember that Western industrial leaders, including Tesla, Mercedes, and VW, have their factories in China and, for example, Mercedes produced around 2 million cars worldwide in 2023 and sold over 750,000 of them in China. How can you be offended at China for having too much production capacity when you produce and sell your own products in China?" Janusz Piechocinski, former deputy prime minister and economy minister of Poland, said in a recent interview with the Global Times.

Noting the EU's access to materials and products from China, including aluminum and rare metals, Piechocinski said, "If we start trade wars, are we aware of their consequences also in terms of accessibility to all elements?"

If the EU side continues to deliberately escalate trade frictions, it will pose serious risks of trade ties spiraling into a trade row that will seriously harm the EU's economy, with many other areas likely to be affected, Chinese experts also said.

"By restricting legitimate international trade, the EU will definitely not promote its own development," Yang Chengyu, an associate research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times, noting that the EC's move seriously undermines Chinese businesses' sentiment toward the EU and undermines its green transition. 

Yang also noted that many European carmakers in particular have taken huge market shares in China, and they are likely concerned that the EC's tariffs will affect their interests in the Chinese market.