Executive Vice President of the European Commission for A Europe Fit for the Digital Age Margrethe Vestager talks to media in the Berlaymont, the EU Commission headquarter on May 23, 2024 in Brussels, Belgium.
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The European Union may be no economic match for its U.S. and China trade partners, but it can seek to contend with them strategically, the bloc’s competition chief said Tuesday.
Margrethe Vestager told CNBC that the EU had become “much better” at defending itself against unfair trade practices, and that it would continue to find novel ways of competing equitably with its economic partners.
“The point is to realise we can never outspend China or the U.S.,” Vestager told Silvia Amaro in Brussels. “We can spend strategically.”
Last week the EU announced new, higher tariffs on Chinese electric vehicle imports after a probe found they had benefited “heavily from unfair subsidies,” which risked undercutting European EV producers.
It follows similar measures by the U.S. last monththe latest phase in a growing trade tensions between the two economic powerhouses.
The EU has been cautious in its positioning amid the spat, careful to not alienate China — one of its largest trade partners — while safeguarding its geopolitical and economic alliances across the Atlantic.
China has hit back at the EU’s tariffs with the launch of an anti-dumping investigation aimed at certain pork products from the EU.
Investing in ‘cutting edge’ tech
Among the EU’s “strategic” investments, Vestager cited a 100 billion euro fund for ten “cutting edge technologies” — including in hydrogen, electric batteries, microelectronics, cloud and health — which she said have “common European interest.”
“That, I think, is a strategic way of using taxpayers money, crowding in private capital, in order to get what the market will not otherwise deliver,” said Vestager, who is also executive vice president of the European Commission.
The U.S., via its $430 billion 2022 Inflation Reduction Act (IRA), has been investing heavily in technology, clean energy, manufacturing and infrastructure. China, meanwhile, continues to pump money into its tech and green industries.
Vestager said that the EU — itself a flagbearer for the green transition — was not “copying” its trade partners by implementing such measures. Asked, however, whether such investment levels would enable Europe to compete in the growing tech arms race, she said comparisons were not always helpful.
“Let’s not get distracted by what they are doing in the U.S. and China. Let’s stick to our guns and make sure that it actually works,” she said.