China is undercutting European products, resulting in a trade deficit of 11 billion kroner a day. Europe is losing both money and jobs, yet cannot make up its mind. Should it confront the issue or submit?
If so, Europe will be stripped of its industry, and its own industry will be replaced by Chinese products.
The EU could have chosen to ally itself with the US, but, paradoxically, chose instead to protect its own industry. In return, it faced tariff barriers. Conditions are now dire.
But the EU is attempting a push towards Beijing. Trade Commissioner Marcos Sefcovic is now travelling to see if it is possible to persuade the Chinese to stop dumping their cars in Europe.
The EU has discovered that China subsidises its cars eight times more than the Europeans do. It is therefore hardly surprising that they are gaining market share. But the EU has known this for many years, without taking any action. Now they are trying to reach an agreement, prompted by Volkswagen’s announcement that it is laying off 100,000 workers.
The green transition has accelerated the decline. Europeans have generally not received the favourable subsidies that Norwegians have been able to benefit from. That is why they have been reluctant to buy electric cars.
However, China is flooding Europe with electric cars that undercut their European counterparts, and is consequently gaining market share.
In Norway, a quarter of those who bought a new electric car chose a Chinese model over a European one. The brand that is still holding its own is Tesla. There, 75 per cent of those who had driven a Tesla from the outset chose to stick with that brand.
Ursula von der Leyen said that the EU was ready for a fight, but did not seem particularly convincing. There has been something half-hearted about the signals from Brussels, and that does not impress Beijing.
NTB correspondent Bibiane Dahle Piene writes that the Norwegian business community is concerned about these developments, but goes on to note:
The imbalance was also a key topic at the EU summit in June. But little has happened since then.
With the EU, it’s all talk; with Trump, it’s action. That is why Trump has commanded respect and has the upper hand over Beijing, but neither the media nor the politicians are willing to admit it.
Europe is on the verge of capitulating to China, and if you give the Chinese an inch, they’ll take a mile.
The EU is now planning to introduce a new protective measure that will cap imports of Chinese hybrid cars, reports Bloomberg. Sales of such cars account for an ever-increasing share of the trade deficit.
China will never accept this and is threatening all-out war.
– The EU may try its hand at a trade war with China, but will come to understand Chinese power in the same way as Trump, writes Professor Wang Yiwei in an email to the Danish newspaper Politiken.
If the EU goes to war with China, it would be tantamount to admitting that Trump was right, and that is a hard pill to swallow.
In that case, Europeans would rather continue to distort reality:
As is well known, the US President put his trade war with China on hold after China struck back hard.
It is the US that is top dog in relation to China. Chinese industry is struggling, and if the EU had formed an alliance with the US, together they would have become a formidable bloc. But the EU defines itself as being in opposition to the US. Europeans have entirely different values.
This narcissism is going to cost Europe dearly.
Senior researcher Jacob Funk Kierkegaard at the Bruegel think tank in Brussels believes it is difficult to imagine that China would voluntarily curb its exports to Europe.
A trade conflict with China is therefore inevitable.
“For if Europe continues to swallow the trade deficit, it will quietly lead to the dismantling of European industry,” he points out to Politiken.
And that, precisely, is China’s ultimate goal, according to Kierkegaard.
– ‘They can only achieve their own growth targets if we write off our industry,’ he says.
The EU is cut from the same centrally controlled cloth as the Communist Party, and cannot bring itself to accept that China wishes Europe so much harm.
