Since the European Commission decided to impose additional tariffs on China's new energy vehicles, German Vice Chancellor Habeck visited China, and China's Ministry of Commerce has also launched a consultation mechanism with EU trade authorities. It is clear that neither side wants to trigger a trade war between China and the EU as a result of this tariff, which will cause huge losses for both sides. But judging from the current communication, a trade war seems inevitable. German Chancellor Olaf Scholz has proposed that China impose an additional 15 percent tariff on cars imported from Europe, but this proposal has not been accepted by China. Moreover, the EU has found that China is fighting back against their pain points, and as the trade friction unfolds, the EU will have more and more "seven inches" being beaten by China.
The EU's imposition of additional tariffs on China is undoubtedly unreasonable, and we will not repeat the relevant reasons. Now we need to see who will have the last laugh if the two sides start a trade war. According to statistics, from January to August 2023, China was in a deficit position in trade with the EU, but China's total exports to the EU fell only 0.7%, while the total export value of the EU to China fell sharply, by 15.4%. This shows that China is gradually reducing its dependence on the European market. On the other hand, China is an important overseas market and source of profits for Europe, and Europe's losses are increasing. In the event of a trade war between the two sides, the EU will suffer far more than China.
We note that China's upcoming countermeasures against the EU are mainly focused on brandy imports to France and pork products from countries such as Spain. If countermeasures are implemented, Europe's agricultural products and agricultural workers will suffer significant losses. And Europe's farmers have a lot of political influence at the top of the country, which is a signal from China to the EU. If the EU continues to impose tariffs on China's new energy vehicles, China will take strong countermeasures against the EU in the broader field of agricultural products. This will certainly cause a huge shock within the EU countries, and it will not be as simple as economic losses.
The countermeasures against agricultural products are actually the first step, and they also cleverly avoid direct impact on Germany, which has the largest share of economic cooperation with China. German Chancellor Olaf Scholz has offered China to impose a 15% tariff on car imports from the EU. This reflects two problems: first, Scholz is concerned that China will impose larger and stronger sanctions on EU products, such as heavier tariffs on German luxury cars. Secondly, the German side also felt pressure from other allies. The biggest beneficiary of the EU's tariffs on China's new energy vehicles is Germany, a major automobile producer. However, China's countermeasures have focused on agricultural products from other countries. Objectively, Germany has taken advantage of it without suffering a lot of losses, which puts Germany in an isolated and passive position within the EU.
If there is a trade war between China and the EU, our biggest advantage will be in the institutional aspect. We can make the whole country work together and be unanimous, and our policies and strategies can withstand the pressure and stick to them for a long time. The EU side is not going to do it, differences and contradictions are the biggest characteristic of the EU, and it is very difficult for them to reach a unanimous resolution. This time, the European Commission's ruling to impose additional tariffs on China's new energy vehicles is itself a forced interim ruling, which has been opposed by many countries within the EU.
It should be noted that this EU ruling is provisional and its statute of limitations is only 4 months. After four months, all EU member states will vote again on whether to turn this provisional ruling into a permanent ruling. In other words, these four months are very important, and what we really need is for the EU to cancel this ruling after four months. How can the EU make decisions that benefit both sides and avoid a trade war between China and the EU?
Communication and exchange are indispensable, but this does not ensure that the EU makes the right choice in the end, and compromises and concessions do not lead to the results we want. Therefore, we must take strong countermeasures within these four months, so that the EU countries can really feel the terrible cost of this. They also need to understand that if they continue to treat China in this way, they will pay an even more painful price.
Only in this way can the EU fully understand what the trade war means to them, and can they realize how powerful and resolute China is now. Only in such a situation can the EU countries have a sober understanding of reality and make the right choice. Therefore, in these four months, a hand-to-hand battle must be fought, and it must be aimed at the opponent's seven inches and fight resolutely, fiercely. Fight with one punch, lest a hundred punches come!