EU ready to make 'full use' of trade defence tools against China, Von der Leyen warns Xi

The European Union stands ready to flex its muscles to protect the bloc from China's aggressive trade practices, European Commission chief Von der Leyen warned Monday following a three-way meeting with Macron and Xi, APA reports citing EuroNews.

It is von der Leyen's starkest warning so far that her EU executive will leave no stone unturned in its bid to stop China's heavily-subsidised manufacturing sector and unfair trade practices from suffocating Europe's homegrown industries.

It is also the clearest sign to date that the bloc is preparing for a potential trade war with Beijing.

"For trade to be fair, access to each other's markets also needs to be reciprocal," von der Leyen told reporters in Paris after meeting the Chinese President alongside France's Emmanuel Macron.

"We stand ready to make full use of our trade defence instruments if this is necessary," von der Leyen added. "Europe cannot accept market-distorting practices that could lead to de-industrialisation here at home."

"Europe will not waver from making tough decisions needed to protect its economy and its security."

Von der Leyen took aim at China for what her executive considers to be unfair subsidies in industries such as electric vehicles (EVs) and steel, which are threatening to decimate Europe's industry.

Beijing's central government is wielding its economic and industrial might to support its manufacturing sectors with subsidies, cheap loans, tax breaks and preferential regulation for its domestic companies.

It has caused a glut of cheap Chinese products to flood Western markets, raising the alarm in Brussels and other EU capitals over China's trade "dumping" practices, where goods are exported at artificially low prices.

Brussels has reacted with an increasingly assertive stance on Chinese trade, and a raft of inquiries that could soon lead to slapping punitive tariffs on Chinese imports.