France’s Finance Minister, Bruno Le Maire, has stated that following the European Union’s decision to impose tariffs on electric cars imported from China, further measures should be taken to address China’s overcapacity issues in other industries.
The European Commission announced on Wednesday, June 12, that the group has formally notified car manufacturers including BYD, Geely, and SAIC Motor Corp, the owner of MG, that tariffs will be imposed on battery electric vehicles before July 4.
Le Maire said on Sud Radio on Thursday, “If Europe does not show its teeth on trade issues, people will eventually see the European market as just a giant shopping center. This is the first decision, and I hope other decisions will follow, especially regarding solar panels and other Chinese overcapacity products.”
While some countries are reluctant to escalate trade tensions, France has long supported imposing tariffs on Chinese electric cars. Le Maire warned that even though it may require a majority vote against the decision of the European Commission to stop this action, there may still be some countries in opposition.
He stated, “We should not evade this fact: this battle is difficult, but I hope everyone understands, every member state understands, that we must rebuild this balance of power with China.”
US Treasury Secretary Janet Yellen recently stated during her visit to China, “The US will not stand idly by as subsidized Chinese imports of low-cost products destroy emerging industries, repeating the experience of the US steel industry from 10 years ago.” She emphasized that her focus is on addressing the overcapacity issues in Chinese electric cars, solar panels, and other clean energy products and communicating with the Chinese government, as these issues pose a threat to US and other countries’ producers.
In recent years, signs of overcapacity in China’s industrial sectors have been evident, especially in industries such as solar panels, lithium batteries, new energy vehicles, and steel. Both energy-intensive aluminum electrolysis and high-end products in shipbuilding and steel, as well as emerging industries like photovoltaic solar and wind power, are recognized by the industry as “overcapacity.”
Despite sluggish domestic demand in China, the country continues to expand its capacity, indicating that the situation in some industries is likely to worsen.
Throughout this year, China’s flood of low-cost high-tech products has inundated the global economy, prompting concerns and complaints from Europe and America, who view this as a new round of unfair competition.
China has repeatedly defended itself, with officials from the Ministry of Finance, Ministry of Commerce, and even the Premier denying these accusations, asserting that there is no such thing as Chinese overcapacity issues. Their basic argument is that from a global perspective, these industries do not suffer from overcapacity, and even if there is some excess capacity, it is deemed a normal phenomenon under a market economy.
(Adapted from reports by Bloomberg)