Valdis Dombrovskis, European Commission Vice-President for the Euro and Social Dialogue, pictured at the Renaissance Harbor View Hotel in Wan Chai. 02DEC17 SCMP/ Xiaomei Chen (Photo by Chen Xiaomei/South China Morning Post via Getty Images)
South China Morning Post | South China Morning Post | Getty Images
The European Union’s trade chief warned on Wednesday against a “weaponization” of trade amid recent escalating tensions between the United States and China.
EU Trade Commissioner Valdis Dombrovskis told CNBC he did not think trade “protectionism” was the answer to heightened geopolitical tensions, but insisted the bloc was ready to defend itself in the new business environment.
“The geopolitical landscape is changing, it is becoming more fragmented, more conflictual, we are seeing a militarization of trade. So we also need to equip ourselves, as the European Union, to operate in this more conflictual world,” Dombrovskis told Karen Tso from CNBC.
His comments follow remarks made on Tuesday by former European Central Bank president and former Italian Prime Minister Mario Draghi, who said the bloc needed to undergo “radical change” if it wanted to remain competitive in the face of refusal of China and the United States. ” respect the rules “.
It comes as US President Joe Biden prepares to call on US Trade Representative Katherine Tai to triple Chinese tariffs on steel and aluminum imports, in a bid to shore up union support in the swing state of Pennsylvania.
Such a move would essentially prevent sales of Chinese steel to the United States and likely redirect Chinese products to other global markets.
Dombrovskis said the proposals would have a clear impact on the EU and noted that representatives were currently engaged in negotiations with the United States over its tariffs towards China.
“Obviously this will have wider implications because clearly the steel market is globally connected,” he said.
Biden’s call marks the latest escalation in tensions between the world’s two largest economies over concerns about Chinese overcapacity. Washington and its allies have accused China of flooding international markets with cheap goods and undercutting the prices of domestic companies – something Beijing vehemently denies.
Last week, US Treasury Secretary Janet Yellen said she would not rule out possible tariffs on Chinese green energy exports as the country increases its production of solar power, vehicles electric and lithium-ion batteries.
His comments were quickly followed by European Commission chief Ursula von der Leyen, who said Brussels needed to take a hard line on trade with China.
However, Europe must find a delicate balance of not alienating one of its largest trading partners while remaining faithful to its geopolitical and economic alliances across the Atlantic.
“If necessary, the EU will be ready to stand up to defend our economy and our businesses,” Dombrovskis said.
His comments came on the sidelines of the IMF’s spring meeting, where the IMF unveiled its World Economic Outlook on Tuesday and highlighted geopolitical tensions as a major threat to global growth.
cnbc
