By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
IndebtaIndebta
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Notification Show More
Aa
IndebtaIndebta
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
Indebta > News > The EU’s impossible choice on trade
News

The EU’s impossible choice on trade

News Room
Last updated: 2025/01/01 at 6:47 AM
By News Room
Share
6 Min Read
SHARE

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The EU, a political project conceived to remove trade barriers, has been raising tariff walls at its fastest rate in 15 years. But just as fast as the defences are built against cheap Chinese imports, fresh storms blow the bloc off balance again.

Donald Trump’s threat to impose levies of up to 60 per cent on everything Chinese would, for instance, put an even higher tariff wall around the US than anything the EU has planned.

The effect, if the US president does follow through, would be to divert Chinese goods from the US to the EU — forcing Brussels to in turn consider hitting back with even tougher defensive measures.

It is an impossible situation for a union that has taken pride in its free trading instincts. Every barrier it erects can save some domestic jobs, but will also reduce the competitiveness of other domestic industries by raising the price of imports.

With China now accounting for 30 per cent of global industrial output, the ripple effects will be considerable on EU products ranging from electric vehicles to Italian tomato paste.

Vulnerable industries, such as steel and glass fibre makers, complain the EU has not been building trade defences fast enough or high enough to save them. “We are close to a tipping point for many industries,” said Laurent Ruessmann, a partner with RB Legal and trade defence expert.   

On the other hand, those who want cheap Chinese inputs to keep their own product prices down, such as paint makers, have lobbied against measures. The EU has put duties on titanium dioxide, a key ingredient, leaving paint makers worried they will have to absorb the cost or lose sales.

Simon Evenett, professor of geopolitics and strategy at IMD Business School, said tariffs always end up costing consumers or other businesses.  

“Europe’s dilemma is either to sacrifice jobs downstream by slapping tariffs on Chinese imports or watch EU producers shrink by doing nothing. When it comes to protectionism someone’s ox always gets gored.”

However, Aegis, which represents heavy industries such as steel and chemicals, argued that the EU is sitting on the fence.

Trade defence measures cover far less of its EU imports than other trading blocs, according to Aegis. The number of tariffs has grown to their highest level since 2009, with 141 in force in 2023. But rebased against total imports, the US, Australia and Canada have more than 10 times bigger protective shields. 

“Claims that EU manufacturers use trade defence as a protectionist tool do not stand up to scrutiny,” it said in a report. 

Brussels has responded. In a move asked for by Aegis, it now automatically registers imports when a trade investigation is opened. It can then backdate tariffs if it wishes, deterring stockpiling during the months-long probe to beat the price rises.

But even with tariffs in place, China has tended to find ways around them. 

Since the EU put antisubsidy duties in 2010 on glass fibre — used in construction, wind turbines and other industries — Chinese producers have doubled their market share. 

After the tariffs were imposed, imports started surging from Egypt. China’s state-owned Jushi had opened a plant there, and Brussels eventually put tariffs on Egypt too. 

Ludovic Piraux, chief executive of producer 3B and president of Glass Fibre Europe, said the tariffs were ultimately too low. “Companies operating within a market economy like ours cannot withstand the relentless attacks from Chinese state-subsidised competitors,” he said.

The steel industry is feeling the squeeze most — hobbled by weak demand, high energy costs and regulation forcing it to invest to eliminate carbon emissions.

Steel production hit its lowest ever in 2023, 128mn tonnes, according to Eurofer, the lobby group. Trump slapped tariffs on the metal in his first term to protect his voters in the industrial heartland of the US — and could reactivate them within days of his return.

Axel Eggert, Eurofer director-general, said: “We have to decide if we want a European steel industry or not.”

Carmakers — themselves now partially protected by tariffs from a surge of cheap, allegedly subsidised Chinese electric vehicle imports — need EU steel, Eggert argued. While they might be tempted by cheaper Chinese offerings to lower their costs, “as soon as we are gone, the Chinese will raise prices”.

The EU might be tempted to reopen talks with the US on a “green steel club”, which would allow tariff free trade between members while those outside pay.

This was once dismissed by Brussels as incompatible with World Trade Organization rules. But senior EU officials now hint that they could be flexible in interpreting the rules. In this hostile environment, even good students of trade multilateralism may find it impossible to stick to their principles.

Read the full article here

News Room January 1, 2025 January 1, 2025
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
UBS orders bankers to scale back sale of complex currency products

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

Investors should not be taking risks right now amid geopolitical uncertainty, analyst says

Watch full video on YouTube

How Canada is saying no to American products

Watch full video on YouTube

JPMorgan Chase Stock’s Newest 6% Bond Appears Better Than CDs Or Treasuries (NYSE:JPM)

This article was written byFollowAbout My Writing: I am currently focused on…

Oil prices see biggest jump in 3 years on Israel-Iran escalations. Analyst talks risk for producers.

Watch full video on YouTube

- Advertisement -
Ad imageAd image

You Might Also Like

News

UBS orders bankers to scale back sale of complex currency products

By News Room
News

JPMorgan Chase Stock’s Newest 6% Bond Appears Better Than CDs Or Treasuries (NYSE:JPM)

By News Room
News

Fidelity Overseas Fund Q2 2025 Commentary (Mutual Fund:FOSFX)

By News Room
News

Empire State Realty Trust, Inc. (ESRT) Q2 2025 Earnings Call Transcript

By News Room
News

Crown Castle Inc. 2025 Q2 – Results – Earnings Call Presentation (NYSE:CCI)

By News Room
News

Microsoft poaches top Google DeepMind staff in AI talent war

By News Room
News

White Brook Capital Partners Q2 2025 Commentary

By News Room
News

EU must strengthen Asian security ties despite US pressure, says Kaja Kallas

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?