POLITICO — 2023-09-13
News from Brussels
European Commission President Ursula von der Leyen announced Wednesday she would launch an anti-subsidy investigation into Chinese electric vehicles, yielding to calls by France to hit back at surging imports.
The announcement follows months of pressure from Paris and its proxies in industry and the European Commission to launch a probe into insurgent Chinese e-carmakers that have stolen a march on European manufacturers.
"Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market," von der Leyen said in her annual State of the European Union address.
"So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open for competition. Not for a race to the bottom."
Critically, von der Leyen's announcement won swift backing from Manfred Weber, leader of the European People's Party.
“We don’t want to see Chinese electric vehicles benefiting from our climate policies,” Weber told MEPs after von der Leyen’s annual address. “We have to activate our trade defense instruments to avoid another solar panel attack,” he added, referring to a previous trade fight that devastated Europe’s solar power players a decade ago.
The Bavarian politician’s comments were significant because the German car industry has a major presence in China and would be most exposed to any potential retaliation by Beijing.
Such a probe could open the way for Europe to impose additional levies against Chinese vehicles it reckons are benefiting from excessive state aid that enables them to outcompete European competitors. More broadly, it marks another step in Europe's shift from the world's largest free trade bloc towards building its trade defenses in an era of deglobalization.
The probe is likely to top the agenda at a high-level EU-China economic and trade dialogue that has been scheduled for September 25, ahead of a bilateral summit later this year.
After von der Leyen's speech, EU Trade Commissioner Valdis Dombrovskis confirmed he would travel to China next week for the trade talks.
"We're open to competition but not to unfair practices. That's why we’re launching an investigation on Chinese e-vehicles," Dombrovskis posted on X (formerly Twitter).
"I will travel to China next week to engage on trade & economic opportunities/challenges. We want to keep dialogue open; to de-risk, not decouple."