Van Overtveldt: “Europe must respond to Chinese practices with import tariffs”

Ahead of next week’s European summit, delegation leader Johan Van Overtveldt used the debate in the European Parliament to call for decisive action against China’s structurally unfair competition. According to Van Overtveldt, Europe must seriously consider introducing a general tariff of at least 10% on Chinese imports.

“Europe has been naïve for far too long. If China systematically distorts the level playing field, we must be prepared to defend ourselves.”

Europe’s declining Competitiveness The extent to which companies in one country can compete with similar companies in another country. A law came into force in Belgium in 1996 to monitor competitiveness. This stipulates that Belgian salaries may not evolve faster than the average of those in the three neighbouring countries. The Central Economic Council (CEC) performs an annual measurement to see if the objectives have been obtained. competitiveness is high on the political agenda. Soaring energy prices are a major factor, but Van Overtveldt argues that fundamentally unfair competition from Chinese exporters poses at least as serious a threat to European industry and prosperity.

“Free trade remains one of the most powerful drivers of economic and social progress, but only when everyone plays by the same rules,” Van Overtveldt says. “For years, China has deliberately disregarded those basic rules in order to build up its industrial power. Europe cannot continue pretending this is simply normal market competition.”

Trade deficit continues to widen

According to Van Overtveldt, the urgency of the situation is clear from the trade figures. Last year, Europe’s trade deficit with China stood at around €360 billion. China exported €571 billion worth of goods to the EU, compared with roughly €200 billion in European exports to China. Based on the figures provided, the deficit is expected to reach at least €400 billion this year.

“This has long since stopped being about a handful of cheap products that benefit European consumers. Entire industrial sectors are coming under intense pressure, from the automotive industry and mechanical engineering to batteries and components for renewable energy. If we fail to act today, we may wake up tomorrow to find that essential industrial capacity has disappeared from Europe for good.”

Structurally unfair competition

Van Overtveldt points to four mechanisms through which China systematically distorts international competition: massive state subsidies, shielding its domestic market from foreign competition, an artificially undervalued currency and large-scale infringements of intellectual property rights.

“European companies are expected to compete in an open market against businesses that benefit from extensive state support, while our own companies struggle to gain access to the Chinese market. That is not a level playing field. Europe must stop turning naïveté into trade policy.”

Tariff of at least 10%

Van Overtveldt is therefore calling for a fundamental debate on a general tariff of at least 10% on Chinese imports.

“A tariff of at least 10% should be put on the table as an opening move. Not as an end in itself, but to make it clear to Beijing that Europe is no longer prepared to tolerate the systematic undermining of a level playing field. Negotiate where we can, take action where we must.”

Van Overtveldt also argues that the revenue generated by such a tariff could help address the European Union’s growing budgetary challenges.

The possibility that China might retaliate is no reason to remain inactive, he says.

“Of course there is a risk of retaliation. But inaction also comes at a price. The question is not whether taking action against China may carry costs. The question is how much greater the economic and strategic cost will become if Europe continues to stand by and watch.”

Europe must also put its own house in order

Trade measures alone will not restore Europe’s competitiveness. Van Overtveldt therefore also stresses the need for a stronger single market, a genuine European capital markets union, a more growth-oriented competition policy, and further simplification and deregulation. Member states must also do more to encourage investment through their tax and regulatory policies.

“Europe must address its own weaknesses while also defending itself against unfair competition from abroad,” Van Overtveldt concludes.