By George Hay and Afiq Fitri Alias
LONDON- “The supreme art of war is to subdue the enemy without fighting”. Chinese strategist Sun Tzu may have been referring to actual conflicts rather than trade disputes when advancing his famous maxim. Still, President Xi Jinping and European Commission boss Ursula von der Leyen have good reason to scour their imports and exports to see if they can achieve a similar outcome.
China’s immediate motivation is tariffs on electric vehicles. Last week the European Union formally outlined provisional charges as high as 48 percent on the value of some Chinese-made cars. As these do not become permanent until November, Xi has an opportunity to persuade von der Leyen to rethink. Given that the EU last year exported goods worth $282 billion to the People’s Republic and received products with a value of $502 billion from its trading partner there is much to play for.
The art of trade spats is to target goods where restrictions hurt the exporter more than the importing nation. Beijing might therefore focus on products which account for a large proportion of the EU’s total exports but are of marginal importance to China. To get at this data, Breakingviews trawled through around 5,000 product categories compiled by the International Trade Centre, a joint agency of the World Trade Organization and the United Nations. We then filtered the numbers to focus on items where the EU’s exports to China exceed $1 billion a year.
