BRUSSELS — European Commission President Ursula von der Leyen announced Wednesday she would launch an anti-subsidy investigation into Chinese electric vehicles, yielding to calls by France to hit back at surging imports.
The announcement follows months of pressure from Paris and its proxies in industry and the European Commission to launch a probe into insurgent Chinese e-carmakers that have stolen a march on European manufacturers.
"Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market," von der Leyen said in her annual State of the European Union address.
"So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open for competition. Not for a race to the bottom."
Such a probe could open the way for Europe to impose additional levies against Chinese vehicles it reckons are being sold unfairly cheaply to grind down European competitors. More broadly, it marks another step in Europe's shift from the world's largest free trade bloc towards building its trade defenses in an era of deglobalization.
The probe is likely to top the agenda at a high-level EU-China trade dialogue in Beijing that has been tentatively scheduled for September 25, ahead of a bilateral summit later this year.
In her speech, von der Leyen said that, while Europe needed to defend itself against unfair trading practices, it was equally vital to keep talking with China. "De-risk, not decouple — this will be my approach with the Chinese leadership," she said.