Can Germany kill the EU’s China tariffs? It’ll be difficult

Decoding transatlantic relations with Beijing.
By STUART LAU
with PHELIM KINE
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HI, CHINA WATCHERS. This is Stuart Lau with your weekly dose of Europe-China news. This week, we’ll see why it’s Mission Impossible for Germany to kill the EU’s plan to impose tariffs on made-in-China electric vehicles. We’ll also have Part One of our survey of the new faces who will help run the EU’s future China policy. Phelim Kine will write to you from Washington on Thursday.
LEST WE FORGET… Uyghur economist and human rights activist Ilham Tohti, who won the EU’s top Sakharov human rights prize, was sentenced by China to life in prison on separatism-related charges 10 years ago yesterday. “The EU reiterates its call for the immediate and unconditional release of Ilham Tohti and other human rights defenders, lawyers and intellectuals who are arbitrarily detained in China,” EU foreign policy chief Josep Borrell said in a statement.
TALKING THE TALK: They met, they talked, they agreed to disagree. After Chinese Commerce Minister Wang Wentao flew to Brussels and held eight hours of talks on Thursday with the EU’s trade chief Valdis Dombrovskis, China did squeeze out another chance to re-up undertakings on price and volumes to avoid duties on imports of its electric vehicles. The two “agreed to instruct their respective teams to put maximum effort to work towards a mutually agreeable solution,” as per the EU readout. The EU is under increasing pressure — also from its own member countries — to put a halt to the tariffs, and come up with some sort of magic deal that could satisfy Beijing without repeating the failures over solar panels.
Behind the Commission’s walls, bureaucrats are doing the math to see if enough EU countries will form a block against the tariff vote, date uncertain as of now.
How many countries are enough countries, you ask? To block the duties, the German chancellor’s office — which is busy lobbying other countries to join its opposition to Brussels — would need a double supermajority:
— In a first vote, the 27 countries’ trade reps based in Brussels could either approve or reject the duties by a simple majority. (That’s 14 of all the members.)
— If there’s a majority against, that wouldn’t be the end of the story. The duties would then go to appeal and be subject to a second, final vote.
— And here, to reject them, opponents would need to amass a qualified majority of 15 member countries representing 65 percent of the EU population. Bigger countries have a bigger say.
Long shot for Beijing? Even if Germany manages to get Spain and Italy on its side, as well as all the others who abstained and the four countries (Hungary, Slovakia, Malta and Cyprus) that already voted against the tariffs in an earlier round, that’s still only 61.4 percent of the population, short of the magic number of 65, according to the calculations by Giovanna Coi, Douglas Busvine and Koen Verhelst. The full story is here.
Buying time: The deadline to penalize heavily subsidized cars is Oct. 30, as per the deadline of the investigation. (But it could be stretched back to Nov. 4, as it was before.)
WTO gets busy: As soon as Dombrovskis was back from the weekend, presumably with a detox from his China talks, his trade team sued China at the World Trade Organization. It launched consultations at WTO (read: it’s the first step of every dispute settlement process) against a Chinese anti-subsidy case against EU dairy products.
The milk tastes just fine, China: In a statement, the bloc’s trade arm said: “The EU’s action was prompted by an emerging pattern of China initiating trade defence measures, based on questionable allegations and insufficient evidence, within a short period of time.”
BACK TO DAS AUTO: German Economy Minister Robert Habeck invited representatives of German car manufacturers (including BMW, VW and Mercedes) and industry associations (such as VDA and IG Metall) to a video conference on Monday.
The reason: Germany’s most important industry is in crisis. The industry has been sounding the alarm to Berlin for weeks, saying the EU tariffs against China would cost the already struggling industry billions more. Our colleague Jürgen Klöckner has more.
Do it yourself: However, expectations of a Berlin-led rescue are low. “A large part of the tasks have to be dealt with by Volkswagen itself,” Habeck told reporters Friday in Emden, where he toured a VW production site. “This is the company’s job.”
WASHINGTON MAKES A MOVE:  The Biden administration announced a sweeping initiative on Monday to ban Chinese-developed software from internet-connected cars in the United States, justifying the move on national security grounds. The action is intended to prevent Chinese intelligence agencies from monitoring the movements of Americans or using the vehicles’ electronics as a pathway into the U.S. electric grid or other critical infrastructure. 
The real economy security: The Commerce Department published a proposed rule on Monday to ban imports of Chinese and Russian vehicles, as well as key hardware and software components, that could be used to spy on Americans or potentially even take control of their cars. “Cars today have cameras, microphones, GPS tracking, and other technologies connected to the internet,” Commerce Secretary Gina Raimondo said in a statement. “It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of U.S. citizens.” POLITICO’s Joseph Gedeon has the full story here (for U.S. Pros).
Beijing growled back. “China opposes the U.S. generalization of the concept of national security and discriminatory practices against Chinese companies and products,” Chinese Foreign Ministry spokesperson Lin Jian said on Monday in response to a question about the new restrictions.
NEW EU COMMISSIONERS: In case you managed to miss all our excellent POLITICO coverage this past week, the EU has chosen a new team of commissioners and, pending the outcome of the European Parliament’s grilling, they’ll start a five-year term at some point this year. China Watcher will go through some of the heavyweights in batches:
EU antitrust czar is a Spanish socialist: Spain’s Teresa Ribera will be in charge of the competition file, which has gained in importance as far as EU-China relations is concerned. China’s locomotive makers, wind turbines and a surveillance equipment distributer have all come under the EU trust buster’s new tool called the “foreign subsidies regulation.” Ribera, who’s been focusing on climate policies back in Madrid, will run this portfolio against the backdrop of Spain’s intention to attract direct investment from Chinese companies, including battery makers, an industry whose state subsidies have been in the spotlight.
On the EV tariff, her stance is clear. “The main message . . . is that it is important to avoid a clash, a trade war,” Ribera told the FT when asked about her personal views on the tariffs. “We need to identify the best tools for how we can develop the car industry in Europe but are also effective in terms of avoiding this trade war,” she said. “This is something that is already being assessed by the commission services and the trade people.”
EU industry boss will be Macron’s foremost disciple: Over the next few years you’ll hear a lot about the EU adopting a firmer industrial policy — which France sees as a necessary tool to fight back against Chinese (and U.S.) dominance. Stéphane Séjourné, briefly France’s foreign minister, was previously tough on China messaging while a member of the European Parliament. He said the EU “can’t consider any new agreement with China” while “some of our colleagues on the sanctions and while the Uyghurs are being persecuted.”
HOUSE PROBE: FEDS FUNDED CHINA’S MILITARY:  China’s military industrial complex may have benefited from hundreds of millions of dollars in federal funding to U.S. research initiatives that included Chinese researchers, a year-long joint probe by the House Select Committee on China and the House Education and Workforce Committee concluded Monday.  “Through nearly 9,000 joint research publications, funded by the Department of Defense or the Intelligence Community, the lawmakers discovered that Americans worked with Chinese researchers on strategic technology research…[on] topics like high-performance explosives, tracking of targets, and drone operation networks, nuclear and high-energy physics, artificial intelligence, quantum technology, and hypersonics – the kind of technology that the Chinese military could use against the U.S. military in the event of a conflict,” the investigation concluded. 
BEIJING BLASTS BIDEN’S HOT-MIC QUAD CANDOR:  Chinese authorities had a field day on Monday with the contradictions in the White House’s assertions that China wouldn’t be a central topic of the meeting of the Quad leaders on Saturday and its actual agenda. National security adviser Jake Sullivan spent a chunk of his Saturday morning telling reporters that “China is not the focus of the Quad” —an informal geopolitical grouping of the U.S, Japan, India and Australia. But moments into a Quad meeting that U.S. President Joe Biden convened later that day in Wilmington, Delaware with Japanese Prime Minister Fumio Kishida, Indian Prime Minister Narendra Modi and Australian Prime Minister Anthony Albanese,  a camera feed picked up Secretary of State Antony Blinken announcing the first topic: China. 
The feed also picked up comments by President Biden, which could be heard by reporters gathered outside the meeting. He said the U.S. sees China’s recent behavior as a “change in tactic, not a change in strategy.” Biden added that “China continues to behave aggressively, testing this all across the region, and it’s true in the South China Sea, the East China Sea, South China, South Asia and the Taiwan Straits,” he said. “It’s true across the scope of our relationship, including on economic and technology issues.” POLITICO’s Eric Bazail-Eimil, Jonathan Lemire and Phelim have the full story here.  Beijing jumped on the contradiction between Sullivan’s comments and the Blinken-Biden hot mic moment. “The U.S. claims that it does not target China [but] the first topic of the summit is about China and China was made an issue throughout the event. The US is lying through its teeth and even the U.S. media does not believe it,” Lin at China’s Foreign Ministry said on Monday. 
CONGRESS TO CONSIDER CHINA INVESTMENT RESTRICTIONS: Congress’ annual defense policy bill appears poised to become the site of the next Capitol Hill clash over regulating investments in China. Legislation that would require Wall Street firms to disclose some investments in critical Chinese sectors is included in a package of bipartisan amendments expected to be attached to the Senate’s annual National Defense Authorization Act. 
A version of the outbound investment screening amendment also passed the Senate as part of the NDAA last year but was blocked from the final version of the bill by House Financial Services Chair Patrick McHenry. The North Carolina Republican has been at odds with China hawks in his party over how to regulate outbound investments in China. The outbound investment amendment is sponsored by Sens. John Cornyn (R-Texas), Bob Casey (D-Pa.) and Dan Sullivan (R-Alaska). POLITICO’S Jasper Goodman has the full story here (for U.S. Pros!).
EMBASSY SLAMS KURT CAMPBELL’S TAIWAN COMMENTS: The Chinese embassy in Washington came out swinging at Deputy Secretary of State Kurt Campbell’s recent comments about Taiwan’s status.  Campbell told a hearing of the House Foreign Affairs Committee last week that Beijing uses United Nations Resolution 2758 —which switched UN recognition from Taiwan to China in 1971 —as a tool to “make the argument that somehow Taiwan’s status is illegitimate” in the eyes of the international community. The embassy responded with a 1,000 word screed asserting China’s much-contested historical claim to Taiwan and urging the U.S. – particularly Campbell! — to “cease the actions that challenge China’s red lines on the Taiwan question.”
RAHM TOASTS CHINA-JAPAN SEAFOOD DEAL: U.S. ambassador to Japan, Rahm Emanuel, praised a “long overdue” Japan-China agreement inked Friday aimed to lift a Chinese ban on Japanese seafood imports. The deal “inches closer to what the international community already knows…that Japanese seafood is completely safe to consume,” Emanuel said in an X post Friday. Beijing blocked Japanese seafood imports in 2023 alleging that Japan’s decision to release contaminated waste water from the Fukushima nuclear plant posed a health risk to consumers.   The agreement allows China to assist in the monitoring of the composition of that discharge and will pave the way for Beijing to  “gradually resume imports of Japanese aquatic products that meet the regulation requirements and standard,” Chinese Foreign Ministry spokesperson Mao Ning said Friday. 
BURNS: CHINA’S  ELECTORAL INTERFERENCE ‘SOMEWHAT RESTRAINED’: Beijing is paying heed to Biden administration warnings to avoid any interference in U.S. “national election or our state elections or county and town elections,” U.S. ambassador to China, Nicholas Burns, told CNN in an interview broadcast Friday.   
The Chinese government “at least in terms of what they say publicly, have been somewhat restrained about involving themselves in our election, “ Burns said. Burns also warned China against viewing the highly polarized U.S. presidential election as evidence of the country’s decline.  Beijing “would make a big mistake if they somehow looked at a normal election, or perhaps a highly spirited election in the United States, with great divisions in the country, and conclude that somehow the United States is weak. We’re strong.” China’s leader Xi Jinping told Biden in their meeting in November that Beijing would refrain from meddling in the U.S. presidential election, CNN reported earlier this year.
BLOOMBERG: Xi unleashes a crisis for millions of China’s best-paid workers.
GUARDIAN: ‘It breaks us deeply’: anguish as China closes door to foreign adoptions.
WALL STREET JOURNAL: Taiwan looks for ways to defend itself as U.S. weapons supply hit by Gaza, Ukraine.
MANY THANKS: To editor Christian Oliver, reporters Giovanna Coi, Douglas Busvine, Koen Verhelst, Jordyn Dahl, Eric Bazail-Eimil, Jonathan Lemire Jasper Goodman and producer Dean Southwell.
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