'Won't waver from tough decisions': EU chief Von der Leyen warns Xi Jinping over unfair Chinese trade practices

European Union (EU) chief Ursula von der Leyen has warned Chinese President Xi Jinping that the EU will not waver from making tough decisions regarding unfair Chinese trade practices.

Von der Leyen met Xi on Monday along with French President Emmanuel Macron in Paris. It was the first of the three stops of Xi’s five-day visit to Europe, which is his first in the past five years. From France, Xi will head to Serbia and Hungary.

The visit of Xi comes at a time when tensions are high between the EU and China over unfair trade practices. The EU is concerned that while Chinese products like electric vehicles (EVs) and steel, which are over-produced as a result of subsidies, are flooding the European markets, China is not granting market-access to European products. Von der Leyen described such an imbalance was a matter of “great concern”.

In remarks after their meeting, Von der Leyen said she was convinced that China and Europe will have “thriving durable economies” if the competition between the two was fair.

‘Europe can’t accept market-distorting practices of China’

Von der Leyen dubbed the Chinese tactics as “market-distorting” and said that these are unacceptable.

Von der Leyen further said that as the domestic demand is weak in China, the country is over-producing goods and these goods are flooding EU markets.

“Europe will not waver from making tough decisions needed to protect its economy and security. Our market is and remains open to fair competition and to investments. But it is not good for Europe if it harms our security and makes us vulnerable. Europe cannot accept the market distorting practices that could lead to deindustrialisation here at home,” said Von der Leyen, as per The Guardian.

EU investigates Chinese imports, tariffs not ruled out

Last year, Von der Leyen announced an investigation an anti-subsidy inquiry into cheap EVs’ imports from China. Since then, the EU and China have engaged in tit for tat investigations.

China responded with a probe on imports of European brandy, which was followed by a separate EU investigation into Chinese renewable energy equipment such as wind turbines and solar panels. China retaliated to the action by barring European companies from winning contracts with China. The EU followed it up with another probe on imports of medical devices from China.

There are indications that the EU may up the ante. Following the Monday’s meeting with Xi along with Macron, Von der Leyen said the EU is “ready to make full use of our trade defence instruments if this is necessary”. Separately, top EU trade official last month said tariffs may soon be imposed.

Valdis Dombrovskis, the European Commissioner for Trade, told Politico that the EU probe into imports of Chinese EVs was “advancing” and said that the EU could impose tariffs “before the summer break”.