A French government advisory body has warned that intensifying competition from China poses a direct threat to European industry, calling on the EU to consider radical protective measures. Paris, however, has moved to temper expectations, stressing it does not support blanket solutions covering all imports.
A report published on Monday by the Haut-Commissariat à la Stratégie et au Plan argues that the European Union should consider a uniform 30 per cent tariff on all goods imported from China in response to mounting competitive pressure from Chinese firms. As an alternative, the authors suggest a 20–30 per cent depreciation of the euro against the yuan.
Pressure on Europe’s industrial base
According to the report, Chinese companies are rapidly increasing their market share in Europe, including in sectors seen as critical to the EU’s industrial base. The automotive, machinery, chemicals and battery industries are singled out as particularly exposed.
The authors estimate that as much as a quarter of French exports and up to two-thirds of German industrial production face direct competition from China. The analysis draws on consultations with European manufacturers, who point to a Chinese cost advantage of 30–40 per cent, compounded – as the report puts it – by an undervalued exchange rate.
Current EU trade defence tools, including anti-dumping investigations, are described as too slow and insufficient given the scale of the challenge.
Finance minister: no one-size-fits-all answer
France’s finance minister Roland Lescure distanced himself from the proposal, acknowledging that China’s current trade advantage vis-à-vis the EU creates imbalances that will need to be addressed over time. He cautioned, however, against searching for a single, universal tariff solution.
Lescure argued in favour of targeted duties in cases of unfair competition, while emphasising the need for measures that strengthen Europe’s competitiveness and capacity for innovation. He also said France should continue engaging in dialogue with Beijing, noting China’s stated willingness to boost domestic consumption.
Beijing warns of retaliation
China moved quickly to respond to the French report. The social media account Yuyuan Tantian, affiliated with state broadcaster CCTV suggested that if Paris pushes in Brussels for 30 per cent tariffs on Chinese goods, Beijing could launch investigations into French companies or impose retaliatory duties on EU exports.
The signals from Beijing triggered a nervous reaction in financial markets. Shares of cognac maker Rémy Cointreau and spirits group Pernod Ricard briefly declined amid concerns over potential Chinese countermeasures.
The French government stressed, however, that the advisory body’s recommendations do not represent official state policy, although it did not dismiss the concerns outright. Beijing, for its part, said it remains open to dialogue while warning that it is “prepared for any challenges.”