EU protectionist measures risk backfiring

Beijing consistently views the EU as a key partner. Cooperation between the two sides is not the source of Europe’s current difficulties; rather, it presents a vital opportunity for the continent to regain economic momentum. Beijing (ANTARA) – As European commissioners prepare to discuss the bloc’s trade relations with China, they must recognise that protectionist measures will ultimately prove counterproductive, while mutually beneficial cooperation remains the most effective path forward. Since the start of this year, the European Union (EU) has repeatedly updated its ‘trade defence arsenal’ by introducing various restrictions targeting Chinese companies and products. Most recently, by planning to force European companies to diversify suppliers, the bloc has continued to accumulate investment barriers and institutional discrimination, with China bearing the brunt. The protectionist measures imposed by Brussels continue to disrupt trade and economic cooperation between the two trading partners, further worsening the overall prospects of the bilateral relationship. In reality, the EU’s decisions will do little to alleviate its concerns or resolve any issues. With 99% of European businesses being small and medium-sized enterprises (SMEs), any measures that increase production costs will undermine the continent’s industrial competitiveness. Furthermore, given the structural complexity of global supply chains, particularly in advanced manufacturing, efforts to ‘reduce risks’ or decouple will only generate significant costs and disruptions. Europe’s trade concerns also stem from declining manufacturing competitiveness. However, instead of developing new growth engines to revitalise its industrial base, the bloc appears to be adopting a misguided approach by increasingly viewing economic issues through a security lens. China has reiterated that unilateral EU actions allegedly violate World Trade Organization (WTO) rules and will cause significant harm to China-EU economic and trade relations, disrupt global industrial and supply chains, and ultimately burden Europe itself. Beijing does not seek a trade war with the EU, but will take firm retaliatory measures if the EU continues targeting Chinese companies or products. Nevertheless, China consistently maintains that, given the economic complementarity between the two sides, mutually beneficial cooperation offers the best path for Europe to overcome its current economic difficulties. Actions speak louder than words. A recent survey by the EU Chamber of Commerce in China shows that European companies are increasing manufacturing efforts in China despite EU pressure to reduce risks. Nearly a third of respondents reported increased onshoring in China, while 68% said they are maintaining or expanding operations there. China is also prepared to resolve trade issues with the EU through dialogue. Currently, Beijing is engaged in WTO negotiations with the bloc over the EU’s plan to impose new steel tariffs from 1 July. Beijing consistently views the EU as a key partner. Cooperation between the two sides is not the source of Europe’s current difficulties; rather, it presents a vital opportunity for the continent to regain economic momentum. The EU may believe that taking a tougher stance against China will halt its industrial decline and protect its global standing. However, in reality, such measures would constitute a fatal strategic miscalculation, the consequences of which Europe itself will bear.