China and the EU Signal Possibility for Closer Trade Relations | OilPrice.com
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Breaking News:
Chinese and EU officials this week signaled the two may forge closer trade ties amid President Trump’s tariff offensive. That’s despite EU attempts to restrict the flow of Chinese goods into the EU, especially in energy and EVs.
Citing a statement from the Chinese Commerce Ministry, Reuters reported that Beijing and Brussels had “exchanged views on strengthening their economic and trade cooperation in response to U.S. tariffs.”
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The talks come after the EU slapped tariffs of up to 35.3% on Chinese electric cars on top of an already existing 10% tariff in a bid to protect European automakers, which have been struggling to compete with the Chinese majors on both cost and quality.
The European Union has also discussed restricting import flows of things like Chinese solar panels and other equipment in order to stimulate domestic production and boost self-reliance on what the EU leadership sees as a vital segment of the energy industry.
Building that self-reliance will be difficult, however, when China controls all transition-related supply chains after decades of building them. In rare earths alone, China accounts for 70% of global supply, not to mention solar manufacturing capacity and battery capabilities.
President Trump on Wednesday announced a 90-day pause on most tariffs as well as a reduction to 10% but it remains to be seen whether the EU would take this move at face value and assume it had avoided the worst. In the meantime, the bloc is discussing deeper trade relations and investment cooperation with Beijing. Since this is unlikely to be seen as a desirable development in Washington, a response may be in the making.
Closer cooperation with China may be a mixed blessing for European companies involved in the energy transition. On the one hand, such cooperation could give them access to Chinese know-how. On the other hand, dependence on Chinese anything is no cause for celebration in Europe, of course.
By Irina Slav for Oilprice.com
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