The French government’s strategy report suggested that it would consider two options to counter the influx of cheap Chinese imports into Europe: impose an unprecedented 30 percent tariff on Chinese goods or devalue the euro by 30 percent against the yuan.
The report emphasizes that Europe is facing increased competition from China, which is actively conquering European markets. This includes such traditionally dominant sectors as automotive, machine tools, chemicals and batteries. It is noted that the implementation of the proposed measures will be a challenge.
Difficult choices
The document was prepared by the Upper Commissariat for Strategy and Planning – a French government body subordinate to the Prime Minister and determines long-term public policy, writes profinance.ru.
The analysis showed that key sectors of European industry, such as automotive, machine tools and chemicals, are threatened by competition with China. A quarter of French exports and up to two-thirds of German manufacturing face this challenge.
According to consultations with European manufacturers, Chinese export growth is driven by improved product quality and a significant price advantage of 30-40%.
At the same time, the report recognizes that devaluing the euro will be more difficult than imposing duties, although this move will also require broad support among EU countries.
French Finance Minister Roland Lescure said last week that France is ready to discuss currency market volatility at this year’s G7 meeting if necessary.
