EU chief Von der Leyen warns Xi Jinping against China’s unfair trade practices – Firstpost

European Union (EU) chief Ursula von der Leyen has warned Chinese President Xi Jinping that the EU will not hesitate to make tough decisions regarding China’s unfair trade practices.

Von der Leyen met Xi on Monday with French President Emmanuel Macron in Paris. It was the first of three stops during Xi’s five-day visit to Europe, the first in the past five years. From France, Xi will visit Serbia and Hungary.

Xi’s visit comes at a time of high tensions between the EU and China over unfair trade practices. The EU is concerned that while Chinese products like electric vehicles (EVs) and steel, overproduced due to subsidies, flood European markets, China is not granting market access to European products. Von der Leyen described such an imbalance as a matter of “great concern.”

In her remarks after their meeting, von der Leyen said she was confident that China and Europe will have “sustainable and thriving economies” if competition between the two is fair.

“Europe cannot accept Chinese practices which distort the market”

Von der Leyen called Chinese tactics “market distortion” and said they were unacceptable.

Von der Leyen further said that with domestic demand low in China, the country is overproducing goods and these goods are flooding EU markets.

“Europe will not hesitate to make the difficult decisions necessary to protect its economy and security. Our market is and remains open to fair competition and investment. But it is not good for Europe if it harms our security and makes us vulnerable. Europe cannot accept market-distorting practices that could lead to deindustrialization here,” Von der Leyen said, according to The Guardian.

EU investigates Chinese imports, tariffs not ruled out

Last year, Von der Leyen announced an anti-subsidy investigation into imports of cheap electric vehicles from China. Since then, the EU and China have engaged in tit-for-tat investigations.

China responded with an investigation into imports of European brandy, which was followed by a separate EU investigation into Chinese renewable energy equipment such as wind turbines and solar panels. China responded by banning European companies from winning contracts with China. The EU followed up with another investigation into imports of medical devices from China.

There are some indications that the EU could up the ante. After Monday’s meeting with Xi and Macron, Von der Leyen said the EU was “ready to fully use our trade defense instruments if necessary.” Separately, last month a senior EU trade official said tariffs could soon be imposed.

Valdis Dombrovskis, the European Commissioner for Trade, said Policy that the EU’s investigation into Chinese electric vehicle imports was “moving forward” and said the EU could impose tariffs “before the summer holidays”.