How to reduce the EU’s yawning €1bn-per-day trade deficit with China will be the main item on the EU Commission’s agenda this week, with Beijing’s commerce minister Wang Wentao and EU trade commissioner Maros Šefčovič in Brussels on Monday (29 June) for a highly-anticipated meeting.
The commission has made no secret of its growing frustration at Beijing’s reluctance to acknowledge that its combination of subsidies and deliberate over-supply are crippling EU firms and pose a systemic threat to the future of the bloc’s manufacturing industry.
Šefčovič’s office has drafted plans for an ‘overcapacity’ instrument that would allow the EU to impose new tariffs on a raft of Chinese industrial goods and import limits.
His officials have also mooted a ‘diversification’ instrument that would force European companies to diversify supply sources in critical sectors, in a move to reduce industrial dependency on China.
But while the meeting with Wentao had been billed by EU officials in early June as crunch talks on China’s industrial oversupply, pushback from some EU leaders at their summit in Brussels in mid-June on the urgency of implementing new trade defence measures means that diplomatic fireworks are not expected.
