EU-China Trade Tensions

Beijing has criticized the European Union for imposing unfair trade barriers on Chinese companies, as the world’s second-largest economy prepares for the possibility of new U.S. tariffs following Donald Trump’s anticipated return to the White House at the end of January.

China’s Ministry of Commerce has published the findings of an investigation, claiming that the European Commission’s selective enforcement of competition policy unfairly discriminates against Chinese companies. In October, the EU increased tariffs on electric cars made in China. Beijing argues that the definition of “foreign subsidies” is subjective and causes unfair harm, warning that it should anticipate retaliation.

A 20-page report from the Chinese Ministry of Commerce indicates that the European Commission has consistently warned companies about potential retaliatory actions for violating regulations and has threatened them with substantial fines. Furthermore, the report claims that some Chinese companies were forced to cancel projects to have investigations against them dropped. According to the Chinese Ministry of Commerce, this has resulted in losses exceeding 15.6 billion yuan, equivalent to approximately $2.13 billion.

Last year, the European Union initiated an investigation into a Chinese train manufacturer that planned to supply trains to Bulgaria. The scope of the investigation was later expanded to include Chinese-owned solar panel companies attempting to build a photovoltaic park in Romania. Additionally, European authorities conducted raids on the Dutch and Polish offices of Nuctech, a Chinese security equipment supplier. In response, Beijing launched its own trade investigation into European products, which could result in increased tariffs on luxury car imports from the EU.

China and the European Union share a strong “symbiotic” economic relationship, and President Xi Jinping expressed hope that the bloc can become a “reliable partner for cooperation” during his conversation with European Council President Antonio Costa on Tuesday. The EU official emphasized the need for Beijing to play a role in contributing to a just and lasting peace in Ukraine.

The EU’s foreign subsidy regulation is designed to safeguard businesses within the bloc’s 27 member states from unfair competition. The regulation grants Brussels the authority to investigate instances where state subsidies are suspected of distorting market conditions.