EU’s top diplomat Josep Borrell: China trade war ‘maybe unavoidable’

Josep Borrell.
Photo: EPA-EFE

A trade war with China may be “unavoidable”, the European Union’s top diplomat, High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, Josep Borrell has warned, ‘South China Morning Post’ informs.

Speaking at an event in Spain he said: “We mustn’t be naive, we have no interest to get into a trade war… but maybe it’s unavoidable, it’s also in the logic of things.”

Borrell, who is set to retire in October, said cheap Chinese-made products including electric vehicles were being diverted to the European market because of higher tariff rates in the United States.

“They [the US] don’t ask us when they ban the import of Chinese cars, they’re not going to ask us where those Chinese cars are going if they’re not going to the US… I am sure they will go to the European market, and this is generating a competitiveness issue with our industry,” he said.

The European Commission proposed definitive tariffs of up to 36.3 per cent of Chinese-made electric vehicles.

A day later, Beijing launched an anti-subsidy probe into EU dairy imports, adding to existing anti-dumping investigations into brandy and pork products.

With EU leaders vowing to protect their markets from subsidised Chinese competition and Beijing pledging to “take all necessary measures to resolutely defend the legitimate rights and interests of Chinese companies”, a trade war looks to be increasingly inevitable.

Despite this, Borrell – who will leave his role once the European Parliament confirms his likely replacement, former Estonian prime minister Kaja Kallas – said the EU should avoid “systematic confrontation” with China.

He insisted the bloc had no interest in “containing China’s rise”, adding: “We cannot embark on systematic confrontation with China.”

He noted that Chinese Foreign Minister Wang Yi had frequently pushed back against the EU’s characterisation of Beijing as a “systemic rival”.

“Europe must not oppose itself to China’s rise, because this rise is a fact – China… is at the cutting edge of all technology,” Borrell said.

“They are not only selling cheap T-shirts, they are competing. To oppose ourselves to the rise of China as a power is impossible – China is a great power.”

He also expressed scepticism about the prospect of reviving an EU-China investment deal that has been in the deep-freeze since MEPs refused to ratify it over sanctions on EU lawmakers.

Beijing imposed the sanctions in response to the EU’s own penalties on Chinese officials over alleged human rights abuses in Xinjiang, accusations that China denies.

“So if there is no lowering of the sanctions, I cannot tell the European Parliament to ratify the agreement. It is sad, we will lose, but these are the political restrictions that exist – and it’s not going to change,” Borrell said.

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