EU threatens to walk away from trade showdown with China over lack of progress

The European Union is willing to walk away from crunch trade talks with China if meaningful progress is not made, its ambassador to Beijing suggested on Friday. The two sides are discussing the EU’s tariffs on Chinese imports of electric vehicles with a view to setting a minimum price, as well as Chinese investments in the EV supply chain. However, the ambassador, Jorge Toledo, warned during a panel discussion: “We are having technical negotiations in Brussels … They are not making progress. “They are not making progress so much so that we were supposed to hold the high-level economic [and] trade dialogue, and I’m afraid we are not going to hold it because … in order to hold it, we need progress. We need deliverables.” The economic dialogue is one of a series of meetings supposed to take place in the run-up to a summit slated for July 24 in Beijing. These preliminary events are supposed to be used to agree the agenda for the summit and produce outcomes that the leaders can announce – at least in theory, although in recent years the main event has seen more sparring than deal making. Beijing and Brussels have agreed the timing for discussions on human rights, the environment and a broader geopolitical dialogue between their foreign affairs chiefs. However, a date for trade talks – which would be led by Commerce Minister Wang Wentao and EU trade commissioner Maros Sefcovic – is proving elusive with one Brussels source warning they “will not happen any time soon”. The European Commission has a long list of grievances related to “non-market policies and practices” that it says result in industrial overcapacity and to cut-price Chinese shipments arriving in Europe at the expense of local manufacturers. These issues appear to be the main barrier and Brussels sources say they are beginning to feel insurmountable. “There is a lot of room for improvement. I’m afraid there is more and more room every day, because the situation is getting worse and worse. So we need progress, we need deliverables, and we are not getting it,” Toledo told the event, which was organised by the Centre for China and Globalisation, a think tank. He pointed to a lack of progress on Chinese duties on cognac imports, which were seen as a response to the tariffs on EVs. French President Emmanuel Macron discussed the matter during a call with his Chinese counterpart Xi Jinping on Thursday, posting on social media that they had “agreed to move forward as quickly as possible on the issue of cognac”. However talks involving Chinese vice-premier He Lifeng in Paris on the matter last week ended with no agreement. Toledo also lashed out at China’s export controls on rare earth minerals as an “extremely serious problem”, which despite being aimed at the United States “are affecting our industries very seriously”. Toledo rubbished claims that resurrecting a defunct investment pact would help improve relations, echoing previous remarks from Marjut Hannonen, the EU’s top trade diplomat in Beijing that the European side had “no interest” in doing anything to revive the Comprehensive Agreement on Investment (CAI). Toledo said issues such the CAI, the EV tariffs and the US-led ban on the Dutch firm ASML shipping its top chipmaking equipment to China “have nothing to do with it, and we have to talk about what we feel is an unlevel playing field”. The comments are likely to further dampen speculation that the EU and China may be able to move closer in the wake of Donald Trump’s tariffs and torching of the transatlantic relationship. On Friday the US president threatened to impose 50 per cent tariffs on the EU over what he called the “unacceptable” trade deficit. Russia is proving another problem, with Europe consistently asking China to do more to convince its partner in Moscow to end the war in Ukraine. “It has darkened our relationship,” Toledo said, adding that he and other EU diplomats had said “many times … that this is existential for Europe, and that we cannot understand the Chinese political and diplomatic support for Russia”. Nonetheless, dialogue in other areas will continue. On June 13, Chinese officials will be in Brussels for talks on human rights before visiting the Tyrol region on the Austrian/ Italian border to “showcase how multilinguism in education can happily function”. The site region, where a mixture of German, Italian and the local Ladin dialect is spoken, used to be the subject of a long-running border dispute but the “site trip” will be used by the EU to broach China’s alleged “coercive” efforts to replace local languages in Tibet and Xinjiang with Mandarin. However, sources believe that the environment may be the one area in which July’s leaders’ summit may produce tangible outcomes following a meeting in Brussels this week between China’s special envoy for climate change Liu Zhenmin and EU climate commissioner Wopke Hoekstra.

EU threatens to walk away from trade showdown with China over lack of progress

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The bloc’s ambassador Jorge Toledo said he was ‘afraid we are not going to hold’ key talks paving the way for a leaders’ summit

The bloc’s ambassador Jorge Toledo said he was ‘afraid we are not going to hold’ key talks paving the way for a leaders’ summit