The High Commissioner for Strategy and Planning, a unit under the French Prime Minister's Office, has proposed that the EU impose a common tariff of up to 30% on Chinese goods.

The agency argues that the EU's current safeguards are insufficient to cope with the increasing competitive pressure from the Chinese industry.

The aforementioned proposal was outlined in a report published on February 9th, warning of the “systemic threat” that China’s industrial strategy poses to the EU’s competitiveness.

The report cites warnings from major European industrial groups, including a key aerospace company, that China's technological catch-up pace is following a similar trajectory to that of the automotive industry. Another nuclear company stated that Chinese competitors can build projects four times faster and at four times the cost, while maintaining comparable quality and workplace safety standards.

According to the report, China is no longer competing solely with Europe in traditional labor-intensive industries such as textiles or low-cost consumer goods, but has risen strongly in high-tech and high-value-added sectors such as artificial intelligence (AI), energy conversion, and defense industry.

Thomas Grjebine, an economist at the French Center for International Studies and Information, said that most industries have witnessed China catching up with, or even surpassing, China in technology, even in areas previously dominated by Europe such as chemicals, machine tools, robotics, and nuclear power.

The report emphasizes that all European economies are affected, both in export and domestic markets, with Germany considered the "most vulnerable" to the wave of competition from China. Approximately one-third of Germany's exports and nearly two-thirds of its domestic production are assessed to be at direct risk. It is estimated that up to 55% of EU manufacturing output is currently under competitive pressure that is "difficult to sustain in the medium term."

The difference in production costs between China and Europe currently averages between 30% and 40%, and even over 60% in some segments. The report suggests that, in this context, upgrading quality, improving productivity, or adjusting production organization is not enough to offset these enormous cost gaps.

Assessing current EU measures such as anti-dumping duties on electric cars and batteries, or import quotas on steel and aluminum, the report concludes that these are only the beginning and are fragmented, focusing on individual sectors. Even the "first Europe" policy has limited effectiveness due to its insufficient comprehensiveness in addressing what is considered a systemic challenge.

Based on this, the Office of the High Commissioner for Strategy and Planning proposed two options to “change the approach.” The first option is to establish a common tariff of 30% on Chinese goods, requiring the EU to adjust its free trade stance, which has long been tied to a strict interpretation of international trade law.

The second option is monetary in nature, proposing to devalue the euro by 20% to 30% against the yuan to restore the price competitiveness of European industry, although the authors themselves acknowledge that this is a complex solution and difficult to reach a consensus on among central banks and EU member states.

Source: VTV

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