Escalation of Trade Wars? EU to Increase Imports Quotas and Tariffs on China

The European Union's Commissioner for Industrial Affairs, Stéphane Séjourné, said on Thursday that the EU will deploy import quotas and tariffs in a more systematic way, extending the scope of safeguard measures from individual companies or specific raw materials to the entire industry level in response to what the EU sees as a "survival" threat from Chinese imports.

"We will apply safeguard clauses to the industry in a more comprehensive manner, not just targeting businesses or specific raw materials," Séjourné stated. He noted that the current investigation process, which takes eight to nine months, often cannot save an industry in a timely manner, "a less fragmented approach allows us to transcend industry-wide difficulties." 

Data disclosed by Séjourné shows that the EU's daily trade deficit with China has reached one billion euros, and that China's overcapacity is threatening 29 million jobs in Europe. Industries such as chemicals, metals, clean technology, and even automobiles and machine tools are all facing the impact of unfair competition from China. He also pointed out that the World Trade Organization is no longer seen as a short-term solution and that the EU needs an independent European response mechanism.

However, Séjourné emphasized that this move is not seeking decoupling from China: "Our goal is not to sever ties with China, but to achieve a genuine rebalancing." He pointed out that the EU could use the attraction of the single market as leverage, "which could be a weakness for China." 

The related measures will be advanced alongside proposals to compel companies to diversify their supply chains, and the European Commission will hold a special China-themed meeting on Friday to discuss. Meanwhile, "resilience" tool proposals put forward by France and four other member states are also under assessment; this tool can impose quotas or additional tariffs on suppliers when the concentration of imports exceeds a certain level.

Séjourné candidly admitted that member states such as Spain and Germany still have reservations about sending negative signals to China, and there is internal divergence in the coordination within the EU. But he warned that if Brussels does not take a stronger stance, within three to four years, each member nation may choose to reclaim control of trade policy, "which would be the best way to split the single market and further weaken the EU's international standing."