Ursula von der Leyen
Tensions between Brussels and Beijing have persisted since negotiations began in June. Over the summer, China barred its companies from participating in EU antitrust investigations, while the European Commission continued to open trade defense cases over suspicions of dumping of Chinese goods on the European market.
“Dialogue with China remains essential. But it must yield results. And when dialogue alone is not enough, we must be prepared to make full use of our tools,” Euronews quotes Ursula von der Leyen as saying in a speech to the French employers’ association Medef.
Chinese imports into the EU have risen by 45%
According to the European Commission president, the EU is facing a wave of cheap imports from China: over the past five years, their volume has increased by 45%, and 30 investigations into trade defense measures have been launched over the past year. This is “nearly three times the historical average.”
Von der Leyen’s remarks came as the EU’s trade deficit with China reached 1 billion euros per day. The European Commission has set October as the deadline for reaching an agreement with Beijing that would balance trade relations.
In recent months, Beijing and Brussels have found themselves on the brink of a trade war several times: China has repeatedly threatened retaliatory measures in response to proposed EU rules that could restrict Chinese companies’ access to the European market.
On Thursday, von der Leyen noted that all EU member states currently have a trade deficit with China.
The EU’s“tradebazooka”
In June, EU leaders granted her a mandate to act to rebalance relations both through dialogue and by applying and revising safeguard mechanisms. Among these is the Anti-Coercion Instrument, an EU tool that can be activated if a third country exerts pressure on the EU to change its policies.
This mechanism, sometimes referred to as the “trade bazooka,” allows the EU to take tough measures, such as restricting access to government procurement or revoking intellectual property rights.
However, its implementation requires the support of a majority of EU member states. It remains unclear whether this can be achieved, given that EU member states continue to engage in bilateral trade with China, seeking access to its market and attracting investment from Beijing.
