EU unafraid of trade war with China amid row over electric vehicle probe
- European officials say the bloc’s economy can survive any retaliation by Beijing against a newly unveiled anti-subsidy investigation
- ‘We don’t have to fear any country,’ France’s finance minister says, calling the EU ‘one of the most powerful economic continents’
The EU insisted on Friday that its economy could survive any retaliation from China, after Beijing warned that Brussels’ probe into Chinese electric car subsidies would harm trade relations.
Europe put itself at risk of a trade war when European Commission president Ursula von der Leyen announced the anti-subsidy investigation on Wednesday, accusing China of keeping car prices “artificially low by huge state subsidies”.
The investigation could see the European Union try to protect European carmakers by imposing punitive tariffs on cars it believes are unfairly sold at a lower price.
The day after von der Leyen’s announcement, the Chinese commerce ministry hit back at the EU’s “naked protectionism”, and said the measures “will have a negative impact on China-EU economic and trade relations”.
Trade with China makes up around 2.5 per cent of euro zone GDP, but economy commissioner Paolo Gentiloni appeared to be unfazed by the warning when asked about whether the bloc’s economy could survive any tariffs.