The EU appears ready to use its arsenal in a trade war against China

After years of building up an arsenal for a trade war against China, Brussels seems ready to finally use it, writes the European publication Politico. The reason for the comment was searches carried out a few days ago by European investigators at the offices of Nutech in the Netherlands and Poland, part of an investigation into the generous state subsidies that Chinese companies receive to the detriment of European businesses.

China’s representatives in the EU stated that “the inspection shows the deterioration of the business environment in the EU and sends a negative signal to all foreign companies”.

However, not only the sharp reaction is important, but also the timing of the raids – shortly before the start of the first visit of Chinese President Xi Jinping to Europe in five years. He is expected to visit France, Serbia and Hungary in May.

According to Politico, the EU’s actions are in stark contrast to how the community has approached the trade problems it has with Beijing until now. For years, Brussels has been cautious in discussing state subsidies for aluminum production and green technologies, and has rarely clashed directly with China.

European countries, however, reconsidered their dependencies after the beginning of the war in Ukraine and now they seem ready to toughen the tone against China. There already seems to be a consensus in the community that core technologies should be protected, and the first signals were sent in October with the first investigations into state aid for the electric vehicle sector.

Brussels is now continuing with wind turbines and hospital equipment, the publication adds.

“We like fair competition. We don’t like it when China floods the market with massively subsidized electric cars. We are fighting against that – “yes” to competition, “no” to dumping,” commented EC President Ursula von der Leyen after the inspection at the offices of the Chinese company on Wednesday (April 24).

Analysts told Politico that for years the EU has accumulated tools for a trade war with China. The question now is how effectively he can use them. So far, whenever the EU has taken action, Beijing has had a ready response – ordering Boeing rather than Airbus, or refusing purchases of French wines. What’s more, China has a few more goats in this game, such as the rare earth minerals so necessary for the development of new technologies.

Politico also writes that France is at the heart of the EC’s actions against Beijing. Paris also used Ursula von der Leyen’s plans to run for a second term as head of the EC. To succeed, it needs French support and would now act with French President Emmanuel Macron, who says his goal is to preserve European industry.

The community has also begun rethinking its stance on China’s Belt and Road Initiative, and according to documents seen by Politico, the EC is recommending a more serious push into the mining and energy sectors in Africa and Central Asia.

The reaction of the USA to the new European actions will also be interesting – for years Washington has been disappointed by the positions of Brussels towards China. In any case, Americans are now intrigued by the development of the situation, writes Politico.

Meanwhile, US Secretary of State Anthony Blinken spoke with Chinese President Xi Jinping in Beijing in an attempt to get China to drop its support for Russia, The Wall Street Journal added. According to US intelligence, 90% of the microchips and other components needed by Moscow to manufacture missiles and drones are supplied by Chinese companies. Although not a lethal weapon, which Beijing says it does not provide, these supplies boost Russia’s military potential at a critical time in the war with Ukraine.

Russian President Vladimir Putin is planning his first visa in his new term at the head of Russia in China. In this way, he will respond to Xi, whose first visit was to Moscow, and try to strengthen the close relationship between the two countries.