Future EU Chief Pledges Tough Action on China

European Commission Vice President Maros Sefcovic Rob Pinney/PA

The trade chief-designate of the European Union pledged tough action on China’s overcapacity exports.

At a parliamentary confirmation hearing on Nov. 4, Maros Sefcovic, the Slovakia-born European commissioner designate for trade, called China the EU’s most challenging trading partner.

“EU is not interested in trade wars,” Sefcovic said, pointing out that China’s problems include overcapacity, subsidies, and an unequal playing field. “We are looking for rebalancing our relationship with China in areas where we feel our relationship is not fair.

“We will tackle with all our force overcapacities being created by China and threatening our industry in Europe.”

On Oct. 4, the EU decided to impose hefty duties on electric vehicles made in China, the highest-profile trade measure against the country in more than a decade.

The investigation found that the battery electric vehicles (BEVs) value chain in China receives unfair subsidization, which poses an economic threat to EU BEV producers, according to an Oct. 29 statement from the European Commission.

Under the new duties, which went into effect on Nov. 1, sampled Chinese exporting producers SAIC, Geely, and BYD are subject to countervailing duties of 17 percent, 18.8 percent, and 35.3 percent, respectively.

Other cooperating companies are subject to a duty of 20.7 percent. Tesla was assigned a duty of 7.8 percent after a validated request for a personal evaluation. Companies that are not cooperating will face a 35.3 percent duty.

The decision aligns the EU with those of the United States and Canada, as U.S. President Joe Biden in May imposed a 100 percent tariff on EVs shipped from China, quadrupling the previous 25 percent tariffs, while Canada also adopted a similar measure.

In response to the EU’s move, China’s communist regime denied the accusations and called the tariffs “trade protectionism.”

“[Raising tariffs] will only shake and hinder the confidence and determination of Chinese companies in investment and cooperation in Europe,” China’s Ministry of Commerce said. “China will take all measures to firmly protect the interests of Chinese enterprises.”

It has filed a complaint with the world’s largest trade organization against the EU’s tariff increase on electric vehicles.

The commission negotiators are continuing discussions with their Chinese counterparts regarding minimum price commitments for imported cars.

“What is very important for us is that even if you go [for price undertakings], they have to be equally effective and enforceable as the import duties we introduced. So that’s absolutely key for us,” said Sefcovic, who will also serve as the commissioner for economic security, pending approval in a vote by members of the European Parliament later this month.

Sefcovic has been a commissioner with various portfolios since 2009 and is among 26 commissioners nominated by the EU executive chief Ursula von der Leyen. He is currently participating in hearings at the European Parliament this week and the following week. The next commission will start work after gaining parliamentary approval.