Beijing. French President Emmanuel Macron has brought a new turn in the global trade war. Taking a sharp stance on China’s growing trade surplus and the worsening economic imbalance for Europe, Macron has clearly indicated that if Beijing does not take steps to reduce its trade deficit with the European Union, Europe may also impose heavy tariffs on Chinese goods like the US. In an interview after his recent visit to China, he said it was a matter of “life and death” for European industry and that Europe would no longer quietly accept China’s unilateral trade policy.
Macron’s sharpest attack was on China’s policy due to which Europe is becoming a dumping ground for Chinese products. He said that China is sending goods on a large scale to sell to Europe, but it is becoming increasingly difficult for European companies to enter the Chinese market. He said that China’s business model is unsustainable—”If the customer becomes weak, then to whom will China sell its goods?” This statement is a clear warning of the European leadership’s growing displeasure and tougher measures to come.
Macron also made it clear to Beijing that time to improve the situation is limited. If China does not respond, Europe will be forced to take steps like imposing tariffs on the lines of the US in the coming months. Till now Europe was considered relatively soft compared to China, but this warning from Macron indicates the end of that era. The European Union’s trade deficit with China has increased by nearly 60 percent since 2019. Cheap Chinese electric vehicles, solar panels and steel have taken a large share of Europe’s markets. In contrast, European companies have to go through stringent regulations and restrictions to do business in China. The domestic industry of many countries including France is being affected by this imbalance. Macron said Europe is not only grappling with China’s aggressive manufacturing policy, but is also under pressure from the US’s “America First” policy. When China limits exports to the US due to protectionist measures taken by the Trump administration, its excess goods flood European markets and prices collapse. Describing this as an extremely dangerous situation for Europe, he said that this is weakening the model of European industry.
Not just a warning, Macron has also given a compromise proposal to China. He suggested that Europe could relax restrictions on exports of semiconductor machinery—which is vital to China’s tech industry. In return, China will have to remove restrictions on the export of its ‘rare earth minerals’. These minerals are important for battery, mobile, electronics and defense industries and China is their largest producer. Macron also said Chinese companies should invest in Europe and add value to the local economy by setting up new factories instead of just selling goods. He believes that this balanced and mutually beneficial model can provide stability to global trade. This entire development has indicated that major changes may be seen in Europe-China relations in the coming times and the next phase of the global trade war may become even more intense.
