Before the China-EU trade war broke out, Macron sent people to the door first, hoping that China would "calm down"?
The new round of consultations between China and the EU is still in the preparation stage, and the Macron government has sent people to visit China in advance to take the lead in contacting China. However, as far as the current situation is concerned, China and France have very limited common language on tariff issues. Our Minister of Commerce urged France to play an active role in China-EU economic and trade relations. Although it is just a routine statement, to some extent, it can be said that it is not an ultimatum, but it is better than an ultimatum.
[French senior officials come to "defend their rights"] However, the French side has always been holding on to the countermeasures previously introduced by China. The French Deputy Minister of Trade claimed that the EU does not intend to escalate the situation and will continue to do business with China, but will not "succumb to pressure" on key issues. The key issue mentioned by the French is actually the anti-dumping duties recently introduced by China against the French brandy and dairy products industry.
It is generally believed that this is China's "punitive measure" against France, because France played a very important role in the EU's tariff policy on Chinese electric vehicles, from the initiation of the investigation to its formal implementation. It is not an exaggeration to say that it is the main driving force, and naturally it has become the primary target of China's countermeasures. Before leaving for China, the French senior officials released the news that they would not only convey Macron's message on this trip, but also question in person whether China's countermeasures against France were reasonable. It can be seen that until now, France still believes that China's anti-dumping duties on the French brandy industry are for so-called "political purposes."
[China urges France to play an active role, this statement is not an ultimatum but more like an ultimatum] However, France's reason is obviously untenable, because we impose anti-dumping duties in strict accordance with the WTO process. Domestic industries apply and we initiate investigations. When the EU formulated its tariff policy, it simply skipped this process and completely ignored the fierce opposition from European car companies.
Overall, Macron's visit to China is a gesture of wanting to have it both ways. He wants to "protect his rights" and to settle the Sino-EU trade dispute. However, considering all aspects, this is a situation where you can't have your cake and eat it too. The EU has made up its mind to fight and negotiate at the same time, so it will wait for the punitive tariffs to be officially implemented before sending a delegation to China for negotiations.
[The last round of China-EU consultations made limited progress and major differences still exist]
Fighting is to give an explanation to the hardliners against China and the "de-risking" argument within the EU; talking is also to give an explanation to those who advocate friendship with China. This is the contradiction in the EU's policy toward China. It recognizes the important position of China-EU economic and trade relations, but is trying every means to find excuses for itself to show its strength against China. France does not reject this decision. Even this time, it sent high-level officials to visit China, and it was mentally prepared to fight and talk at the same time, but Macron still hopes that his losses can be as small as possible. Now, due to China's targeted countermeasures, French brandy companies are taking to the streets to protest. Although this is insignificant compared to Macron's strategic planning for French electric vehicles, it is also an invisible pressure over time.
Therefore, for France, the ideal situation is to continue to show strength to China on the issue of tariffs without being met with tit-for-tat countermeasures from China. It is best to negotiate a solution with China first. Whether it will be implemented is secondary. The key is to appease the emotions of domestic companies first.
[French brandy practitioners took to the streets to protest]
But it is hard to say how much practical effect this opportunistic attitude will have. France wants to persuade China to downgrade or cancel its countermeasures against France to avoid paying the price for supporting the EU's punitive tariffs, which is somewhat wishful thinking. Let's put France's idea aside for now. At present, China and the EU are arranging a new round of consultations on electric vehicle tariffs. This time, the EU sent a delegation to China, but it is very difficult to reach specific results in a short period of time.
First, there are indeed deep-rooted differences between the two sides. The EU refuses to accept the overall price plan proposed by China. At the same time, it is trying to divide individual car companies and reach separate price agreements. As for the possible negative impact on the China-EU negotiations, this is no longer a priority for the EU. Secondly, the EU's tariffs on China have officially landed, which is the biggest negative factor in the negotiations. Past experience tells us that once a tariff war begins, it is difficult to stop it.
Not to mention how China and the United States were in the past, when Trump was still in office, the United States and the European Union imposed tariffs on each other. After Biden took office, the EU's tariffs on the United States were not cancelled, but have been shelved until now. In other words, the EU can restart the tariff policy at any time depending on the situation.
[The EU is actually waiting for the results of the US presidential election]
It is worth mentioning here that the EU's top leaders are also preparing for the possibility of Trump taking office, so as to avoid being caught off guard by Trump's imposition of tariffs again. When it comes to the United States, there are many signs that the EU is easily influenced by external factors when it comes to dealing with China on tariffs, especially the United States as a third party.
The EU may not take further action on tariff policy until the official result of the US presidential election is announced. Whether it will show goodwill to China or remain tough to the end depends on who wins the election between Trump and Harris. The EU is also worried that if Trump takes office, the US-EU trade war will start the second round. At that time, the EU will not only have to deal with trade disputes with China, but also have to deal with Trump who does not play by the rules. This is beyond the EU's capabilities.
However, if Harris wins the election, the EU's punitive tariffs on China would be a token of allegiance to the new president, showing that the two sides can find a common language on the "small courtyard and high walls" and continue to enrich the US-EU transatlantic partnership.
