Keep the EU Out of Trump’s Trade War

Published in Dagens Nyheter
(Sweden) on 14 December 2016
by Carl Johan von Seth (link to originallink to original)
Translated from by Daniel Buller. Edited by Sarah Hamilton.
It sounds like the world has gone mad when the European Union and the United States are expected to acknowledge China as a market economy. What next, LGBT certification for Saudi Arabia? A big democracy prize for North Korea?

It should still be uncontroversial to acknowledge China’s new status. The issue is not whether the Communist Party deserves the status. Instead it is about the decision to fulfill a promise to treat the country equally after it was given membership in the World Trade Organization in December 2001.

That is when a transition agreement classifying China as a nonmarket economy was signed, a solution that made it possible for the U.S. and the EU, among others, to introduce high tariffs against Chinese imports. These tariffs were much higher than would have been possible without the nonmarket economy status. Allegedly price-dumped goods, everything from solar panels to bikes and industrial steel, have faced heavy tariffs.

Even the Americans had described the arrangement as temporary. On Monday, the 15-year agreement expired, but both Brussels and Washington missed the deadline.

Beijing didn’t hesitate but instead quickly commenced its first move in a formal dispute. Even though this would also be against the rules, China is expected to take revenge on the EU and the United States. There is a danger that the world’s three biggest economies are going to be at each other’s throats.

The next move came as early as Wednesday, with Chinese authorities announcing that they are planning sanctions against American car manufacturers. Beijing claims that the timing is a coincidence. The accusation against the companies is “abuse of dominant position.” It is suggested that the fact that Donald Trump recently provoked China by having discussions with the Taiwanese government – a taboo in Beijing – did not have anything to do with it, but it is most likely a contributing factor.

It is impossible to tell what Trump’s next step is going to be, but it is unlikely that he is going to ease the escalating conflict. Commercial confrontation is high up on the agenda, and it’s not going to make China, nor the U.S., wealthier.

In the meantime, the inner workings of Brussels are moving slowly. The EU claims to be on the verge of acknowledging China’s new status. However, stopping a trade war is rather urgent. Agreements must be kept. Trump’s agenda is not ours.


Det låter som uppochnedvända världen att EU och USA förväntas erkänna Kina som marknadsekonomi. Vad härnäst, hbtq-certifiering av Saudiarabien? Stora demokratipriset till Nordkorea?

Att erkänna Kinas nya status borde ändå vara okontroversiellt. Saken gäller inte huruvida kommunistpartiet har gjort sig förtjänt av etiketten. I stället handlar beslutet om att uppfylla ett löfte om likabehandling som omvärlden gav landet när det blev medlem i Världshandelsorganisationen, WTO, i december 2001.

Då skrevs en övergångsbestämmelse in i avtalen som klassade Kina som icke-marknadsekonomi. Den lösningen har möjliggjort för bland annat USA och EU att införa höga skyddstullar mot kinesisk import. Högre än vad som skulle vara möjligt utan stämpeln på Kina som icke-marknadsekonomi. Påstått prisdumpade varor, alltifrån solpaneler och cyklar till industristål, har belagts med extra tull.

Även amerikanerna brukade beskriva upplägget som provisoriskt. I måndags löpte så den 15-åriga tidsfristen ut, men både Bryssel och Washington missade deadline.

Peking vilade inte på hanen utan drog snabbt i gång en formell tvist. Fast det också skulle vara emot reglerna förväntas Kina ta hämnd på EU och USA. Världens tre största ekonomier riskerar att hamna i luven på varandra.

Nästa drag kom kanske redan på onsdagen. Kinesiska myndigheter berättade att de tänker införa sanktioner mot amerikanska fordonstillverkare. Peking hävdar att tajmningen är en tillfällighet. Anklagelsen mot företagen lyder "missbruk av dominerande ställning". Det faktum att Donald Trump nyligen har muckat gräl med Kina genom samtal med Taiwans regering – tabu i Peking – sägs inte höra till saken men ligger alldeles säkert i vågskålen.

Vad som blir Trumps nästa steg går inte att veta. Men att han skulle kyla av den uppblossade konflikten med Kina är ett långsökt scenario. Ekonomisk konfrontation står högt på dagordningen. Det kommer inte att göra vare sig Kina eller USA rikare.

Under tiden mal kvarnarna långsamt i Bryssel. EU säger sig vara på väg att erkänna Kinas nya status, men det brådskar att förhindra ett handelskrig. Avtal ska hållas. Trumps sak är inte vår.
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