EU Subtly Warns To Use 'Trade Defense Instruments' As China's Xi Jinping Visits France To De-escalate Trade Disputes

The European Union (EU) has indicated its willingness to employ all necessary trade tools to safeguard its economies if China fails to ensure fair market access.

What Happened: On Monday, Ursula von der Leyen, the European Commission President, expressed these concerns following a meeting in Paris with French President Emmanuel Macron and Chinese President Xi Jinping, Bloomberg reported. Von der Leyen pointed out the surge of heavily subsidized Chinese products, such as electric vehicles and steel, into the European market.

"For trade to be fair, access to each other's market also needs to be reciprocal," she said.

"We discussed how to make real progress on market access. I remain confident that more progress can be achieved. At the same time, we stand ready to make full use of our trade defense instruments if this is necessary."

Von der Leyen cited the International Procurement Instrument, established in 2022, which was recently used to scrutinize China’s procurement of medical devices.

She further warned that if a lack of reciprocity is detected, Brussels might restrict Chinese access to tenders. She also voiced concerns over market-distorting practices that could lead to deindustrialization in Europe.

The EU has been increasingly strict in its trade relations with China, echoing U.S. concerns about state-driven overcapacity in the green industry. China, however, refutes these claims and accuses the EU of protectionism.

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France has been a staunch supporter of the EU’s tougher stance. French Finance Minister Bruno Le Maire said these changes mark the end of “happy globalization” and that the EU needs to assert itself with more tools to balance trade with China.

Von der Leyen urged China to address its “structural overcapacities” as it “continues to massively support its manufacturing sector” while domestic demand lags.

“A China that plays fair is good for all of us,” she said.

“At the same time, Europe will not waver from making tough decisions needed to protect its economy and its security.”

Why It Matters: The EU’s stern stance comes amid escalating trade disputes and the ongoing conflict in Ukraine. Chinese President Xi Jinping‘s visit to France coincided with these mounting tensions. France has been particularly vocal about its concerns regarding trade imbalances and the impact of the Ukraine conflict.

Earlier, the EU’s top diplomat in Asia, Niclas Kvarnstrom, warned China over its support for Russia and its significant trade surplus with the EU, citing these as major hurdles to improving relations.

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