The EU will try to challenge the US and China strategically, the bloc’s competition chief has suggested, however it may be no economic match for either.
Margrethe Vestager told CNBC on Tuesday that the EU had become “much better” at defending itself against unfair trade practices, and that it will continue looking for ways to compete equitably with its economic partners.
“The point is to realize we can never outspend China or the US,” Vestager said, pointing out: “We can spend strategically.”
She cited a €100-billion fund for ten “cutting edge technologies” – including in hydrogen, electric batteries, microelectronics, cloud and health – among the EU’s “strategic” investments that 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,” Vestager argued.
The EU’s competition chief said the bloc was not “copying” its trade partners by implementing such measures.
The remark comes as the US has been investing heavily in technology, clean energy, manufacturing and infrastructure via its $430 billion 2022 Inflation Reduction Act. China, meanwhile, has continued pouring money into its tech and green industries.
Asked whether such investment levels would enable Europe to compete in the growing tech arms race, Vestager said: “Let’s not get distracted by what they are doing in the US and China. Let’s stick to our guns and make sure that it actually works.”
Last week, the EU announced new hefty tariffs of up to 38% on Chinese electric vehicle makers, to which Beijing responded by launching an anti-dumping investigation aimed at certain pork products from the bloc. Beijing previously warned that it would target the EU’s aviation and agriculture sectors in response to the duties.
Brussels’ move followed the US having quadrupled tariffs on Chinese EVs to over 100% earlier this month, affecting $18 billion in imported Chinese goods.
Beijing has warned that such measures violate the principles of fair competition and harm the stability of global trade. Chinese officials have repeatedly denounced US trade and tech policies as “economic bullying.”