The European Union must avoid a harmful decoupling of global trade as it considers imposing tariffs on Chinese electric cars and other goods, the European Union's economic chief said Wednesday.
“I think that as far as Europe is concerned, we need a more mature position in our trade, securing our economy… especially with China,” European Commissioner for the Economy Paolo Gentiloni told CNBC's Silvia Amaro.
Gentiloni pointed to ongoing EU anti-subsidy investigations covering the market for electric vehicles and wind turbines, which address concerns that China is flooding global markets with green energy products.
Gentiloni said these investigations are a way to understand whether the Chinese government's subsidies to local companies are “hindering any opportunity for European companies.”
He added, “But this does not lead us to the theory of separation of global trade, which would be a disaster for both sides of the separation.”
“What distinguishes the EU economy is that it is more open, more influenced by trade, and less influenced only by internal consumption. This is the reason, the economic reason, why it is in the interest of the European Union to keep the doors to trade open.” Opens.”
The United States on Tuesday announced a significant increase in tariffs on $18 billion worth of Chinese imports, including electric vehicles and the lithium-ion batteries used in them, solar cells, steel and aluminum.
China says its electric vehicle market is growing because of innovation, not because of government subsidies, and says the US inflation-reducing law – which has also raised concerns about protectionism among European Union officials, including Gentolioni – supports US manufacturing.
Meanwhile, several EU countries are concerned about potential Chinese retaliatory trade measures hitting important domestic industries, from German cars to French cognac.
This comes as the European Union looks to recover from years of slow economic growth and a shallow recession in the latter half of 2023.
Gentiloni on Wednesday struck an optimistic tone about the outlook for this year, which he said comes after a “very, very difficult” 2023 marked by economic recession, increasing levels of savings and uncertainty from the ongoing war between Russia and Ukraine.
“Gradually, activity is accelerating, and the main driver will be private consumption. At the same time, we have two other factors that are very positive,” he told CNBC.
“Inflation is already falling. Employment is still high, very high, and will continue to increase in the coming months.”
