The EU finds its own position towards China

It is a success for Commission President von der Leyen and for the EU’s ability to act. And it is a defeat for Chancellor Olaf Scholz and the “mercantilist” approach to the superpower China. On Friday, the EU states confirmed that the Commission can impose tariffs of up to 35.3 percent on imports of Chinese electric cars. With the aim of compensating for an artificial reduction in prices through state subsidies.

The decision is significant beyond trade policy. It is an expression of strengthened self-confidence and the greater independence of the European Union compared to its Far Eastern rival and system competitor: the EU is finally throwing its market power into the balance. Perhaps the time is now over for Europeans to give in to Chinese threatening gestures sooner rather than later. For example, when it came to the mass import of solar panels or the adoption of security-relevant broadband technology from China.

Berlin is no longer in charge

And something else is new. During the Merkel years, says China expert Noah Barkin, who researches in Berlin, Europe’s China policy was made as a matter of course in the German capital. Berlin spoke to Beijing, set the guidelines and pushed through the result in Brussels. The last time was the short-lived investment agreement of 2020. That is no longer the case. There is a divided government coalition in Berlin. The German economy is weakening. Scholz had little choice but to take note of the initiative from Brussels and swallow the result.

That doesn’t mean that Berlin and the German auto industry didn’t fight back. The specter of a trade war with China has been raised. Countries like Hungary and Slovakia, important suppliers to German industry, gave in. China had also tried to avert the move until recently. His Trade Minister Wang Wentao traveled to Italy hoping to change Giorgia Meloni’s mind.

Unsurprisingly, this didn’t work: Italy’s car industry is in ruins, and the cheaper Chinese imports could bring the once proud car manufacturers even deeper to their knees. In the end, it was France, Italy and Poland that, together with seven other countries, covered Brussels’ initiative. The blocking minority sought by Germany did not materialize.

The result is also a gain in prestige for the power-conscious Commission President. She used the same recipe that had already helped her succeed in the mobilization for Ukraine: she hatched an initiative in a small circle, unexpectedly set the new direction and only then sought broad support from the countries. Because without this she is powerless.

The von der Leyen method

In 2022 it rushed forward with sanctions packages against Russia, then with a daring offer of membership to Ukraine. In fact, she managed to rally the war-shocked countries behind her. She has now managed to do this again in a less dramatic environment. Just a year ago, she unexpectedly announced an investigation into state aid for the Chinese auto industry. Now it has a free hand to impose tariffs.

But nobody is interested in a trade war. Fortunately, neither does China, whose car industry does not want to lose the European market. Negotiations between Brussels and Beijing continue, but Brussels’ position is now broad-based. Divide and rule, the Chinese strategy in dealing with the EU, has come to nothing.