Ursula von der Leyen said that China is distorting trade with ’massive subsidies’ to ‘dominate global manufacturing and supply chains.’
European Commission President Ursula von der Leyen has said that U.S. President Donald Trump is right about broken trade rules and warned that China’s behavior has distorted world markets.
During a June 16 session on the global economy at the G7 summit in Kananaskis, Canada, von der Leyen said that Beijing is not willing “to live within the constraints of the rules-based international system.”
“Because we agree: The current global trading system is not working as it should. Guardrails are clearly missing. On this point, Donald is right, there is a serious problem,” von der Leyen said. “But we strongly feel that the biggest challenges are not the trade between G7 partners.”
She said the source of the “biggest collective problem” has its origins in China’s accession to the World Trade Organization (WTO) in 2001.
“China still defines itself as a developing country,” she said. “This cannot be. … While other[s] opened their market, China focused [on] undercutting intellectual property protections, massive subsidies with the aim to dominate global manufacturing and supply chains. This is not market competition – it is distortion with intent. And it undermines our manufacturing sectors.”
Von der Leyen said that the G7 economies account for 45 percent of global GDP and more than 80 percent of intellectual property revenues.
“That is leverage, if we use it together,” she said.
The EU leader is hoping to negotiate with Trump on a 50 percent tariff on EU goods, which could kick in on July 9. Brussels already faces 25 percent levies on steel, aluminum, and cars, as well as reciprocal tariffs of 10 percent on almost all other goods. The 27-member state bloc also faces a deepening trade rift with China.
By Owen Evans
