Ursula von der Leyen gave the clearest hint yet that the EU is going on the warpath with China.
The European Commission President met China’s leader Xi Jinping at a meeting in Paris along with France’s head of state Emmanuel Macron on Monday.
Among the topics up for discussion was the issue of China’s continuing subsidies for its manufacturing industries.
In particular the EU is worried that Chinese companies are gaining an unfair advantage in industries such as electric vehicles (EVs) and steel through cheap loans, tax breaks and preferential regulation for its domestic companies.
EU leaders fear the subsidies will obliterate European companies trying to compete in these sectors, as cheap Chinese products flood the markets.
At a press conference following the trilateral meeting, Von der Leyen raised the spectre of trade wars with China unless Beijing took appropriate action.
“For trade to be fair, access to each other’s markets also needs to be reciprocal,” she said.
“We stand ready to make full use of our trade defence instruments if this is necessary. Europe cannot accept market-distorting practices that could lead to de-industrialisation here at home.”
She added: “Europe will not waver from making tough decisions needed to protect its economy and its security.”
The tough talk from the EU President comes after growing pressure from the US on European leaders to impose sanctions on Chinese companies helping Russia in its war effort.
The White House claims China is sending weapons-related technology to Russia, providing the Kremlin with everything from chips to cruise missile engines to help in rebuilding its military-industrial base.
The US has called on European leaders to impose sanctions on Chineses companies involved in these transactions.
However, EU leaders appear reluctant to single out Chinese companies, seemingly in order to protect their economic ties with Beijing.
In 2023 bilateral trade between China and the EU reached US$783 billion (£624bn), with a volume of nearly US$1.5 million (£1.1m) every minute, according to China’s government.
A US government official pointed out Europe had imposed sanctions on only three Chinese groups since the start of the Russian invasion two years ago.
By way of comparison the US has imposed 100 financial bans on Chinese entities over the course of the war.
