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Rare earths: EU threatens retaliation with its anti-coercion instrument after China tightens export restrictions
(www.lemonde.fr)
cross-posted from: https://lemmy.sdf.org/post/44760021
- Though still focusing on finding solutions with China in the short term, the EU says it is ready to use "all of the instruments in our toolbox to respond if needed," in particular to the anti-coercion instrument (ACI)
- Adopted in 2023, this trade defense tool enables the EU to impose surcharges or export restrictions, or even block a hostile actor's access to European public markets. It has never been used to date.
- In the long-term, the EU is to provide more funding, offer broader support for research to its partners outside the block such as through the European Global Gateway initiative to better leverage European investments globally. Partnerships on critical raw materials with countries such as Ukraine and Australia, Canada, Kazakhstan, Chile or Greenland already exist.
In addition to blocking markets access and/or raising tariffs, the EU has severe leverage over China, for example:
- Beijing is greatly displeased by the inclusion of Chinese companies in the 18th and 19th rounds of sanctions against Russia, on the grounds that they help Moscow circumvent European retaliatory measures.
- The Chinese government is also upset by Brussels' decision to impose surcharges on Chinese electric vehicles.
- China is worried about a more protectionist Europe, at a time when the US has closed its borders and Beijing needs exports more than ever to offset sluggish domestic consumption. In this regard, the European Steel and Metals Action Plan presented by the Commission on October 7, which calls for doubling tariffs on imports, may foreshadow similar measures in other sectors, such as chemicals.
- Support for the "Made in Europe" doctrine is growing across the continent, and China can only observe its progress within EU institutions.
- The Commission is also working on making foreign direct investment in Europe conditional, and certain groups, such as Huawei, could suffer as a result as their are outright banned over security reasons [a reason China itself often cites in its own protectionism at home.]
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