A trade war is a serious step that calls for preparation. In the modern world, trade ties between countries can be so strong that their severance threatens severe consequences for all parties to the conflict. Any sanctions and bans inevitably cause financial losses. To minimize them, it is important to choose the right strategy.
Before launching a large-scale economic offensive against China, the European Union needs "thorough preparation," European Commission Executive Vice President Maros Sefcovic believes. China is the world's second-largest economy and one of the EU's most important trading partners. This means that the conflict could hurt many sectors of the economy. Thus, the European Commission announced an anti-subsidy investigation into electric vehicles coming from China. "Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies," European Commission President Ursula von der Leyen said in her annual address to the bloc's parliament. However, this move did not go unnoticed.
Beijing in turn accused the European Union of "blatant protectionism" that could seriously disrupt the global automotive industry and supply chains, including in Europe, as well as harm China-EU economic and trade relations. "China believes the investigations announced by the European Union in the name of ‘fair competition’ are actually aimed at protecting its own industries," the Chinese Commerce Ministry said in a statement.
However, the EU was not ready for such a stormy reaction and was forced to back down.
"We are very far from imposing import duties for Chinese vehicles, because [for] these investigations to be fair, [they] must be conducted properly," Maros Sefcovic noted.
