European Commission debates policy shift to protect industry from China
By Julia Payne
BRUSSELS, May 29 (Reuters) – European commissioners met on Friday to discuss how to shield Europe’s industries from surging Chinese imports, and secure alternative supplies of key inputs and critical minerals to reduce the bloc’s heavy dependence on China.
The European Union’s executive aims to pitch ideas ahead of an EU leaders’ summit on June 18 to 19, and possible measures could include forcing EU companies to diversify supply chains or to create new trade tools to curb China’s access in chemicals, metals and clean technology.
Western powers are trying to reverse some of the offshoring to China that peaked in the early 2000s, depleting industrial know-how and hubs across the West, particularly in the U.S. and the EU.
TRADE IMBALANCES, OVERCAPACITY IN FOCUS
The Group of Seven nations (G7) will also tackle trade imbalances and overcapacities 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.
U.S. 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 and 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 the “Buy European” policy and revised tech sovereignty. China rejects the notion that its trade practices are unjust.
Europe’s industry faces a tougher climate than U.S. rivals as it confronts structurally higher energy costs and stricter regulation.
Industry Commissioner Stephane Sejourne said this week he wants the bloc’s existing trade tools such as import duties and quotas to be used “more systematically” across sectors rather than targeting specific companies or materials.
The EU has made efforts to curb some Chinese imports but the results have been mixed. The bloc imposed tariffs on heavily subsidised Chinese electric vehicles (EVs), but not hybrid models. Hybrids accounted for nearly 40% of new car registrations so far this year and China’s market share in Europe continues to rise.
(Reporting by Julia Payne;Editing by Helen Popper)