The European Union wants to work with U.S. President Donald Trump to tackle China’s economic “non-market policies”, Trade and Economic Security Commissioner Maros Sefcovic said, in a rare public admission that the bloc wants to partner with the new U.S. Administration on issues tied to Beijing. At a hearing in the European Parliament, Sefcovic said the EU should be “ready to explore deeper EU-U.S. cooperation on economic security, an area where both the EU and the U.S. want to progress, including on how to deal with the joint challenges coming from China’s non-market policies and practices”. In private, however, the coordination is something Brussels officials have been eyeing for months, as they put together a package of carrots and sticks designed to stave off the worst of the American President’s trade threats. Sefcovic outlined a litany of Europeans’ issues with Beijing’s trade practices, referring to “overcapacity driven by illegal state subsidies” and asserting “we would not accept the situation where Chinese jobs are protected at the expense of Europeans”.
He complained about Chinese, German and American car companies taking the European Commission to court last October over its imposition of anti-subsidy duties on Chinese-made electric vehicles (EVs). BYD, Geely, SAIC Motor, Tesla, BMW and Mercedes-Benz have all taken legal action, according to filings made at the European Court of Justice. The court cases could jeopardize Beijing’s efforts to reach a deal with Brussels that would see a minimum price put on EV imports in exchange for tariff reprieve, Sefcovic said. “You shouldn’t take somebody to court before you want to negotiate. So let’s see how this will evolve,” the Slovakian official added. Sefcovic warned Chinese car companies thinking of setting up factories in Europe that the investments would have to be legitimate if they were to avoid tariffs. “Are they creating real jobs? Are these investments building new production lines?” Sefcovic asked, adding that they should also promote intellectual property and technological transfer as well as “create real value-added”. EU lawmakers are pushing to expand the bloc’s inward investment screening tool to include greenfield sites, such as new EV factories.
While the proposal is likely to face opposition from member states keen to attract Chinese capital, it would – if adopted – see the investments scrutinized for economic and national security risks. It remains to be seen how much common ground on China can be forged with Trump, who has pledged to slap tariffs on European products and railed against the trade surplus the EU holds over Washington, the South China Morning Post reports.