Key facts
- The EU will retaliate against China if unfair trade practices are not addressed by an October deadline.
- Ursula von der Leyen cited China's low-cost exports, restrictions on European companies, and state subsidies as key issues.
- The EU is developing new trade instruments to diversify supply chains and counter Chinese reprisals.
- A deadline of October has been set for China to deliver tangible trade results.
- The EU's Anti-Coercion Instrument exists but has not been used due to member state divisions.
European Commission President Ursula von der Leyen has warned that the European Union is prepared to retaliate against China if it fails to make tangible changes to its trade practices by an October deadline. Speaking during a visit to Ireland, von der Leyen indicated that the EU has various instruments at its disposal and is considering further options if necessary.
Key concerns for the EU include China's surplus of low-cost exports, stringent limitations imposed on European companies operating in China, and the extensive use of state subsidies. Von der Leyen did not specify the exact measures that might be taken if the deadline is missed.
This threat follows an EU summit where leaders mandated the Commission to adopt a firmer stance on China, balancing dialogue with the exploration of new trade tools. The EU is reportedly developing at least two new instruments: one to help diversify supply chains and reduce dependencies, and another to foster solidarity in the face of potential Chinese retaliation.
Irish Prime Minister Micheál Martin, whose country holds the EU Council presidency, echoed the sentiment, stating that trade must be conducted on a fair basis. He expressed hope that dialogue would lead to a resolution, acknowledging the significant interdependence between Europe and China.
Earlier, European Commissioner for Trade Maroš Šefčovič had set the October deadline for "tangible results" after meeting with his Chinese counterpart Wang Wentao. While acknowledging that not all issues would be resolved by then, Šefčovič expressed confidence in making progress, emphasizing that the current trade imbalance is unsustainable.
However, Bernd Lange, chair of the European Parliament's trade committee, has expressed skepticism about the realism of achieving binding concessions by the October deadline.