Mikkel Rosenvold
5 weeks ago

EU launches trade war with China

In a bold move that has sent ripples through global markets, the European Union has effectively launched a trade war against China. This decision, announced just three days after the European Parliament elections, raises significant questions about the influence and timing of the EU’s legislative body.
Brussels, Belgium. 28th Jun. 2016. Plenary room of the European Parliament. — Photo by Ale_Mi
Brussels, Belgium. 28th Jun. 2016. Plenary room of the European Parliament. — Photo by Ale_Mi

The Announcement

On Monday, the European Commission revealed a comprehensive set of tariffs and trade restrictions aimed at curbing what it described as "unfair trade practices" by China. The measures target key Chinese industries, including technology and steel, and represent one of the most aggressive trade policies adopted by the EU in recent history.

A Strategic Timing?

The timing of this announcement is particularly noteworthy. Coming on the heels of the European Parliament elections, it suggests a strategic maneuver by the European Commission to assert its authority independently of the newly elected MEPs. Analysts argue that this rapid move underscores the limited sway the European Parliament holds over immediate and critical economic decisions.

Limited Influence of the European Parliament

Dr. Elena Fischer, a prominent political analyst, remarked to CNBC, "The swift implementation of these trade measures right after the elections illustrates how the European Parliament's influence on real-time economic policies is marginal. This decision was likely in the pipeline for months, independent of the electoral outcomes."

Indeed, the European Parliament, while instrumental in shaping long-term policies and representing the democratic will of EU citizens, often finds itself sidelined in urgent economic and geopolitical strategies executed by the European Commission.

EU's Rationale

In its official statement, the European Commission emphasized the necessity of these actions to protect European industries from what it termed "predatory" Chinese trade practices. European Commissioner for Trade, Valdis Dombrovskis, stated, "We must safeguard our industries and workers from unfair competition. These measures are designed to restore a level playing field and protect our economic interests."

The EU's stance aligns with growing global concerns about China's trade policies, which have been criticized for state subsidies, intellectual property theft, and dumping – selling goods at unfairly low prices to undermine competitors.

China's Response

China has predictably responded with strong objections, accusing the EU of protectionism and threatening reciprocal measures. The Chinese Ministry of Commerce issued a statement warning that "such unilateral actions will only harm global trade stability and economic cooperation."

Market Reactions

Markets reacted swiftly to the news, with European stocks experiencing volatility and Chinese markets facing downward pressure. Economists predict that this trade conflict could escalate, potentially affecting global supply chains and economic growth.

Looking Ahead

As the situation unfolds, the European Parliament's role in influencing future trade policies will be scrutinized. The newly elected MEPs may find themselves in a contentious environment, needing to navigate the complexities of EU governance and assert their relevance in shaping the Union's strategic direction.

In conclusion, the EU's recent declaration of a trade war against China not only marks a significant shift in international trade relations but also highlights the nuanced power dynamics within the EU's institutional framework. The European Parliament, despite being the voice of EU citizens, may continue to grapple with its limited influence over immediate, high-stakes decisions orchestrated by the European Commission.

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