Seeking to address the problem, European Commission President Ursula von der Leyen spoke to Chinese Premier Li Qiang and discussed “setting up a mechanism for tracking possible trade diversion and ensuring any developments are duly addressed.”
“President von der Leyen emphasised China’s critical role in addressing possible trade diversion caused by tariffs, especially in sectors already affected by global overcapacity,” the Commission said in a read-out of the call.
The outreach to China came only a day after the EU’s trade chief Maroš Šefčovič announced a European task force to monitor diversions in Luxembourg, after meeting the bloc’s 27 trade ministers.
Should the diplomatic initiative with China fail, the EU would probably have to introduce “safeguard measures,” which are special duties intended block to sudden diverted trade flows.
The EU and China have a prickly relationship over trade. Brussels has spent years calling out Beijing for resorting to heavily subsidizing its giant export industries like steel, aluminum, electric cars and batteries.
Still, faced with a common adversary in Washington, von der Leyen “stressed the responsibility of Europe and China, as two of world’s largest markets, to support a strong reformed trading system, free, fair and founded on a level playing field.”