The EU will be forced to follow Joe Biden’s tariffs against China whether it likes it or not, otherwise Europe will alone face the concentrated trade shock from Xi Jinping’s predatory mercantilism. It will become the primary dumping ground for China’s exorbitant overproduction of industrial goods, with a flood of cars, batteries, and cleantech components together posing an existential threat to the European social market model. Britain, too, will have to follow suit or become the market of last resort for over-indebted Chinese companies desperately seeking a foreign outlet for excess goods that they cannot sell into their own depressed economy, a fate that would annihilate the UK’s manufacturing base within a decade.
We are beyond the point of theoretical discussions about the merits of free trade. China will eventually wipe out the West’s electric car industry because its carmakers can make a much fatter profit per car overseas. Credit: Bloomberg An open world economy cannot coexist under normal trade patterns with a deformed Chinese economy that accounts for 13 per cent of global consumption but produces 31 per cent of global manufactured goods.
This imbalance is not the result of natural trade flows. Nor is it simply “a reflection of the vitality and creativity of China’s economy” as the People’s Daily told us last week. It is the mechanical consequence of a hyper-investment strategy directed by the Communist Party.
China’s trade surplus has ballooned t.
