EU braces for Chinese trade shift amid US tariff tensions
European Commission President Ursula von der Leyen announced in an interview with the British newspaper Financial Times that the EU will not tolerate a situation in which China redirects goods originally intended for the American market to the EU as a consequence of tariffs.
Von der Leyen noted that Brussels will take appropriate measures to protect the EU market if a significant increase in exports from China to Europe is detected.
The EC President was addressing concerns that the US-China trade war might result in an influx of cheap products from China into the European market, further reducing the competitiveness of EU companies. She added that she had discussed this issue in a phone conversation with Chinese Premier Li Qiang, who assured her that "this risk does not exist because they would stimulate the consumption in China."
At the same time, von der Leyen stressed that the US and the EU agree that the World Trade Organization (WTO) has failed to ensure that China refrains from unfair practices such as price dumping. She added that the trade war has revived discussions on modernising, reforming, and stabilising the WTO. Let us not waste the opportunity this crisis gives us, she said.
Referring to the crisis in EU-US relations related to introducing tariffs, the EC President stated that "It's a turning point with the United States without any question" and "we will never go back any more to the status quo."
After the US decided on 2 April to impose 20 percent tariffs on the EU, the Union responded with tariffs on certain imports from the US at a rate of up to 25 percent. However, when Washington decided a week later, on 9 April, to suspend the tariffs for 90 days, the EU responded similarly. The US and the EU will discuss a possible resolution during this period. One of the EU's proposals is the option of "zero for zero" tariffs on trade concerning specific products.
"The EU may impose restrictions on the import of services"
The EC President announced that if the negotiations do not achieve the desired results, the EU will automatically reinstate retaliatory tariffs, imposed in response to the American tariffs on steel and aluminium imports.
Additionally, as von der Leyen emphasised, the EU may impose restrictions on the import of services from the USA. While the United States has a trade deficit in goods with the EU, it has a substantial surplus in trade in services, particularly technology.
Von der Leyen noted that companies offering services do well in the EU. " Service companies do good business in this [EU] market. And the vast majority of services, 80% of services, come from the US. So again, we want a negotiated solution that is best for us, for all of us," she emphasised.
