Josep Borrell, the EU’s outgoing High Representative for Foreign Affairs and Security Policy, has warned that a trade war between the EU and China “may be unavoidable.”
Speaking at the annual Quo Vadis Europa? conference in Santander in Spain on August 20, the bloc’s foreign chief said Brussels did not want such a conflict but that it may occur regardless.
“Our political systems are different but that shouldn’t lead to a systemic and permanent rivalry. That’s not in our interest,” Borrell said.
“We mustn’t be naive, we have no interest to get into a trade war… but maybe it’s unavoidable, it’s also in the logic of things.”
Borrell, set to be replaced in his role by former Estonian prime minister Kaja Kallas in October, said the current tensions were a “ripple effect” following what had happened between the US and China.
That is in part related to electric vehicles (EVs), originally meant for the US market, being redirected to Europe after Washington imposed higher tariffs on them.
“They [the US] don’t ask us when they ban the import of Chinese cars, they’re not going to ask us where those Chinese cars are going if they’re not going to the US… I am sure they will go to the European market, and this is generating a competitiveness issue with our industry,” Borrell noted.
Despite escalating tensions, Borrell added that the EU should still try to avoid a “systematic confrontation” with China.
“Europe must not oppose itself to China’s rise, because this rise is a fact – China … is at the cutting edge of all technology,” he said.
“They are not only selling cheap T-shirts, they are competing. To oppose ourselves to the rise of China as a power is impossible – China is a great power.”
Borrell’s remarks came as China and the EU have been targeting each other with the implementation of what many see as tit-for-tat tariffs.
Europe has been increasing tariffs on Chinese EVs, accusing the Communist country of excessively subsidising its car manufacturing sector.
In retaliation, China has accused the EU of attempting to create unfair competition with its tariff policies. Beijing has since launched an anti-dumping probe into EU-derived liquor products, with a similar inquiry into EU pork and pork-derived imports having been launched in June.
On August 21, a day after Borrell’s warning, China opened a new anti-dumping probe against the EU, this time focusing on the dairy industry.
Esta tarde en #QuoVadisEuropa debatiremos sobre “Europa entre USA y China”.
Acompáñanos EN DIRECTO con Yves Thibergien (@ubc), Lucas Vázquez Bassats y el presidente del Center for China and Globalization @HuiyaoWang (@CCG_org).https://t.co/D5aVPKPZJ6
— Comisión Europea (@ComisionEuropea) August 20, 2024
