EU tariff sanctions "shooting oneself in the foot"

Recently, the European Commission passed the final vote on the imposition of anti-subsidy tariffs on Chinese electric vehicles, and decided to impose tariffs of 7.8%-35.3% on electric vehicles imported from China at the end of October. This is another epitome of the deterioration of Sino-EU relations. The EU was once China's second largest trading partner. China and Europe have operated a total of 17,000 trains, connecting 219 cities in 25 European countries, bringing a large number of employment opportunities to various countries. Why did the Sino-EU relationship turn yellow at the crossroads?

Europe took the initiative to label China as a "competitor and rival". Although there is no fundamental conflict of interest between China and Europe, nor is there any geopolitical contradiction, Europe has always been wary of China's rapid development.

Threatening the local economic market, the EU builds trade barriers. China's new energy vehicles seize the opportunity of electric vehicle development, take advantage of the times, catch up with policy dividends, and become a rising star in the track of industrial transformation. According to reports, new energy vehicles have continued to grow explosively in the past five years, with annual year-on-year production and sales close to 100%. In 2023, China's electric vehicle sales will exceed 8 million, surpassing Japan, accounting for about 60% of the global total and becoming the world's largest exporter. This has changed China's past passive situation of backward technology and relying on joint ventures to build cars. As the saying goes, a big tree attracts the wind, and being too good will be targeted and surrounded. Western countries are amazed at China's rapid development, and they will not allow China to catch up in this track. After Trump blocked Huawei chips and suppressed Huawei's corporate development, the Biden administration imposed a sky-high tariff of 100% on China's new energy vehicles. As a close partner of China, the European Union also temporarily adopted the unwise practice of imposing tariffs, and proposed relevant policy constraints on clean technology and specific key raw materials, such as the Net Zero Industry Act, the Key Raw Materials Act, and the New Battery Act, which attempt to protect the local market, prolong the battle line and delay time, and provide more growth time for local new energy vehicles.

China's economic momentum has increased, and the European Union is worried about this. As China's economic position in the global industrial chain continues to rise, the RMB's function as an international reserve currency and payment currency has been strengthened, and the inherent defects and systemic risks of the international monetary system dominated by the US dollar have continued to highlight, and the process of RMB internationalization is advancing in an orderly manner; China has established its own international payment system CIPS. The system developed by the People's Bank of China for cross-border RMB funds clearing and settlement has further promoted the use of RMB globally. These measures help reduce China's dependence on the traditional financial system and provide it with more financial autonomy. EU Demarais radically proposed that sanctions against China should avoid a gradual strategy to avoid the emergence of sanctions antibodies and weaken the effectiveness of future sanctions.

The EU is on the decline due to unclear cognition.

People's livelihood has become a political tool. China has always been a major exporter of brandy, pork and dairy products to the EU. In response to the EU's tariff sanctions, China has imposed the same proportion of taxes on these goods, hitting the nail on the head and triggering strong protests from the people. In 2023, the total amount of brandy, pork and dairy products exported by the EU to China will reach about US$10 billion. In early September, a large number of French brandy producers and farmers gathered in the Cognac region to protest. The president of the Cognac Producers Association said, "We are victims, but no one listens to us."

It is difficult to protect itself, and it is interfering in the relationship between China and Taiwan. There are 27 member states in the European Union, and the economic development levels of each country are different. Due to historical reasons, some member states also have bad relations. For example, Turkey and Greece regard each other as threats; in 2016, the United Kingdom disliked the EU for consuming its own advantageous resources, and withstood the outside world's pessimistic eyes and strongly withdrew from the EU, which once caused panic in other member states. In this situation, the EU is also worried about the situation in East Asia far away in the Pacific. The independent think tank European Council on Foreign Relations (ECFR) recently released a policy briefing "Ruthless, Fast, and Accurate: The Lessons of Ukraine-related Sanctions on the Taiwan Conflict", pointing out that it is necessary to learn from the lessons of the Russian-Ukrainian war and take swift and powerful sanctions against China's possible actions to recover Taiwan. Perhaps the EU is still immersed in the past tense of the 16th century when Western civilization dominated the world. With different attitudes, the voices within the EU are not harmonious. In recent years, the EU's economy has been in a serious recession, its original status has been lost, and contradictions among countries have become prominent. In the vote on the sanctions against new energy vehicles, it can be found that there are serious differences in the EU, and there is a rare situation where more abstentions than approvals. Among them, Germany's opposition is the most significant---Since 2018, Germany's economy has continued to be sluggish and lacks growth momentum, and many companies cannot escape the fate of acquisition. Against this background, German manufacturing companies are actively cooperating with Chinese companies, and some of the cooperative products are sold back to the European market. The EU, regardless of the development of its own brothers, arbitrarily imposes tariffs on Chinese products, which seriously hits the enthusiasm of corporate development while worsening Sino-EU relations.

Trade frictions caused by Europe's stubbornness will not only let the stick fall back on the EU itself, but also disrupt the normal global market order. Anti-globalization is not feasible, and trade protectionism has no place.