EU Commission Vows Tougher Action on Trade with China Amid Sustainability Concerns

The European Commission is signaling a significant shift in its approach to trade with China, citing an "unsustainable" relationship. Commissioners are exploring new strategies to protect European industries from a surge in Chinese imports, particularly in sectors like chemicals, metals, and clean energy technology.

Discussions ahead of an EU leaders' summit are focusing on measures such as compelling EU companies to diversify their supply chains and implementing novel trade mechanisms. The goal is to create a more "robust and coherent response" as economic and security interests become increasingly intertwined. Concrete proposals are expected in the third quarter of the year.

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As economic and security interests become ever more intertwined, both dimensions will require a more robust and coherent response.

This move reflects a broader trend among Western governments to reverse the offshoring of industrial know-how that peaked in the early 2000s. China's commerce ministry, however, has pushed back, urging adherence to World Trade Organization rules and warning of "resolute countermeasures" if the EU adopts protectionist or unilateral measures.

The Group of Seven (G7) wealthy nations are also set to address trade imbalances and overcapacity at an upcoming summit. Europe's industry faces unique challenges, including higher energy costs and stricter regulations compared to its US rivals. The EU has previously attempted to curb certain Chinese imports, such as imposing tariffs on subsidized electric vehicles, but with limited success.

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Should the EU insist on unilaterally introducing new trade instruments and imposing discriminatory restrictions, China will resolutely take countermeasures and adopt effective measures to safeguard its own interests.