2023-09-27 02:49:22
Officials who spoke to the outlet on condition of anonymity recalled the solar industry debacle a decade ago, when cheap imports from China destroyed European production, and one of the officials said the European car industry might be vulnerable in the same way.
According to the agency, France’s intention is not to turn the $900 billion-a-year trade relationship between Europe and China into a battle like the one Beijing has with the United States, but rather to establish equal conditions between the blocs. economical.
According to BloombergMacron wants his EU partners to see Europe as a balancing force between the world’s two economic superpowers, but the EU’s hardening stance has also caused jitters.
An official told the agency that it is Beijing’s response is worrying to the opening of an investigation into Chinese subsidies for electric vehicles, while another European public servant recognized the risk of a trade war.
Chinese Vice Premier He Lifeng on Monday expressed his “great concern and dissatisfaction” over the investigation to EU chief negotiator Valdis Dombrovskis.
In accordance with Bloombergsubsidy research might lead to the imposition of tariffs and raises the prospect of a radical change in European policy, which would set aside the principles of free trade and the opening of markets as the best way to defend the economic interests of the continent.
“Any provocation from China is a big gamble for a bloc already struggling to emerge from the energy crisis and the worst outbreak of inflation in the history of the euro zone. Furthermore, Chinese tariffs would be difficult to predict and might entangle a series of large companies on the continent, including French luxury groups, for which Asia’s largest economy is a key market,” says the specialized agency.
“If you look at it very simply, you might say that if European measures on Chinese electric vehicles were to materialise, then there is a risk of retaliation to which German cars might well be more exposed,” said Societe’s chief economist. Generale, Michala Marcussen.
According to Allianz Trade calculations, if the EU imposed a one percentage point increase in tariffs, the total losses for China – taking into account price sensitivity – would be regarding $8.4 billion. Although this may be a large sum, it is only equivalent to 0.2% of Chinese exports compared to 1.5% of EU imports.
Dependence on Chinese products might also transform into an asymmetric inflationary shockas Europe would have to accept higher prices for critical materials, while China might be more self-sufficient or turn to other markets to substitute European products.
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