After weeks of waiting and speculation, Commission President Ursula von der Leyen has finally announced the composition of the new European Commission, which will lead the community executive for the next five years. Faced with numerous economic and security challenges, the Commission’s number one has chosen to entrust the most delicate tasks to commissioners from Spain, France and Slovakia, for the management of external relations, in particular with China.
Who are the commissioners who will have to dialogue (and argue) with Beijing?
Brussels and Beijing risk getting into a dangerous trade war, after the announcement of duties on electric cars made in China and Brussels’ opposition to Beijing’s “unfair competitive practices”. Latvian Valdis Dombrovskis, of the EPP, has left the Trade box to move to that of Economy and Productivity. He is replaced by Slovakian Maros Sefcovic, holder of Trade and Economic Security.
In the mission letter that the president gave to Sefcovic, the Slovak is tasked with managing trade and economic relations with China “in line with our risk reduction policy”, promoting “free and fair” trade. On economic security, Von der Leyen asked Sefcovic to continue working on export controls and screening of investments leaving the European Union.
The French are responsible for economic security and the protection of brandy
Another commissioner designated to deal with European economic and trade security is the Frenchman Stéphane Séjourné, executive vice-president for industrial policy. A last-minute replacement for the outgoing Thierry Breton, who resigned in a dispute with von der Leyen, Séjourné is quite familiar with China, the European Union’s economic rival, having already dealt with it when he was French foreign minister.
Last April, Séjourné met his Chinese counterpart Wang Yi in Beijing to discuss cultural exchanges and bilateral cooperation. During the face-to-face meeting with Séjourné, Wang hoped that Paris would pay attention to “China’s legitimate and reasonable concerns” and ensure a “fair and non-discriminatory” business environment for its companies. In other words, the Chinese giant is asking not to promote the tariffs on electric cars wanted by von der Leyen; in exchange, Paris could avoid a negative outcome of the anti-dumping investigation that Beijing has opened on fortified wines imported from the European Union and, therefore, from France.
Since last January, French brandy has also been targeted by Chinese authorities for an alleged infringement of competition rules, which could lead to an increase in customs duties. With a quarter of its bottles shipped to China, its main market after the United States, French brandy is ultra-dependent on exports, 98% of its sales. According to data from the Bureau national interprofessionnel du cognac (BNIC), China accounted for 19.4% of exports in 2023 and the Chinese market is more profitable than others. If Beijing were to eventually decide to introduce high customs duties, French companies risk finding themselves with large quantities of cognac that are difficult to sell elsewhere, causing them billions in damage.
Germany’s appeal: “Avoid a trade war”
Then there is the issue of energy transition, a key element of the European Green Deal that will be managed by the vice president of the Sanchez government, the Spanish Teresa Ribera (Socialists and Democrats). Sustainable mobility, one of the pillars on which the success of the European Green Deal depends, translates among other things into the spread of electric cars.
Brussels rejects proposals from Chinese manufacturers to avoid tariffs on electric cars
And if Brussels wants to achieve its ambitious climate goals while maintaining the commercial competitiveness of European companies, it will have to move in agreement with China to avoid being crushed by the People’s Republic’s automotive sector. This is the belief of German Vice Chancellor Robert Habeck, who has called on Brussels and Beijing to “find a negotiated solution” in the stalemate on the taxation of Chinese electric cars to “avoid a trade war with spiraling tariffs that would ultimately harm both sides”. Germany is increasing the pressure on European negotiators, after Spain last week asked Brussels to review its position.
Negotiations at a standstill
The doors to a negotiated deal are still open. On September 19, Chinese Trade Minister Wang Wentao will travel to Brussels to try to convince European Trade Commissioner Valdis Dombrovskis to abandon the idea of the EU imposing tariffs. Before they become final, the tariffs must be confirmed by a vote of the 27 EU member states, which will go to the final vote on September 25. The Commission accuses Beijing of distorting competition by heavily subsidizing producers on its territory, allowing them to offer lower prices.
