Everyone in Europe agrees the EU needs to rescue its industry, but the bloc is split over how far it should push a “Buy European” approach to do so.
The European Commission, the EU’s executive arm, plans to propose new rules next week that are expected to include a requirement for companies in strategic sectors to produce in Europe if they want to receive public money.
However, the definition of “European preference” has triggered debate, with calls especially from France for more “Made in Europe,” while other EU states such as Germany call for “Made with Europe.”
Photo: AFP
French President Emmanuel Macron insisted the new rules would be about “protecting our industry” without “being protectionist,” by defending “certain strategic sectors, such as cleantech, chemicals, steel, cars or defense.”
Otherwise, “Europeans will be swept aside,” he warned.
However, other EU countries, which are proponents of free trade, oppose the plans.
Swedish Prime Minister Ulf Kristersson said Europe should compete based on quality and innovation, not because it wanted to protect European markets.
“We do not want to protect European businesses that are basically not competitive,” Kristersson told the Financial Times last week.
EU leaders during talks on Thursday last week appeared to reach a consensus on the issue, pushing for the measure in certain specific sectors since they say Europe faces unfair competition from China and other countries.
“We are in favor of open markets,” German Minister of Finance Lars Klingbeil said on Monday. “But I also want to be very clear: If China changes the rules of the game, if we are confronted with overcapacity, subsidies, and the fact that markets in Europe are flooded, then Europe must defend itself.”
Supporters want “Made in Europe” to be strictly defined, and only for industrial goods made from components manufactured in the European Economic Area, made up of the EU’s 27 states as well as Iceland, Liechtenstein and Norway.
Critics say this definition would be too restrictive and instead call for a more flexible measure, like German Chancellor Friedrich Merz, who calls for “Made with Europe” not “Made in Europe.”
They also argue it would be difficult to apply in practice and risks destabilizing European supply chains.
“Typically, even a vehicle assembled in Europe incorporates hundreds of specialized components sourced from all over the world. Many critical inputs cannot be competitively produced at scale in Europe,” Japanese carmaker Honda Motor Co said.
Britain and Turkey, for whom the EU is an important trading partner, have also privately expressed concern to Brussels about keeping their countries out.
Some EU capitals are worried about potential retaliatory measures from supplier countries, which would drag Europe into showdowns at a moment when it needs to strengthen its exports.
The EU executive insists it has balanced the need to be open and protect firms.
The measure will be “targeted in three ways,” said the office of European Commission Executive Vice President for Prosperity and Industrial Strategy Stephane Sejourne — who is spearheading the push. It will affect: a limited number of critical components, a limited number of strategic sectors and only when public funding is involved.
The final proposal, which is to be announced on Feb. 25, could end up only touching a handful of sectors: the auto industry and those playing an essential role in the green transition and confronted by what the EU says unfair Chinese competition, such as solar panels, wind turbines and batteries.
Sejourne’s office insisted companies producing in the EU would be considered European and there will be “reciprocal commitments” with trusted partners.
A draft document seen by AFP says products made in countries outside the EU with rules similar to the bloc will be treated like those made in Europe.
However, non-EU countries remain watchful until the real proposal lands.
For example, there are still many unknowns including what the percentages of European or equivalent components will be required from manufacturers if they wish to continue accessing public money.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
A new worry has been rippling across the stock market lately: Entire businesses, not just their employees, might be thrown out of work. While most economists say fears of an artificial intelligence (AI) job apocalypse are overblown, seismic shifts have happened in the past after big tech breakthroughs. The IT revolution of the 1990s led to a surge in productivity that sped up the US economy for several years. It also rendered companies or even industries largely redundant — from travel agents and stockbrokers to classified advertising and newspapers, or video rental stores. Economists expect AI would deliver higher productivity,
RSS