China's Dual Squeeze on European Industry Intensifies
- Reference: 0180217617
- News link: https://slashdot.org/story/25/11/26/1811238/chinas-dual-squeeze-on-european-industry-intensifies
- Source link:
The alarm intensified in October when China added five rare earths to its export-licensing regime and then [1]banned exports of computer chips made by Nexperia , a Dutch-headquartered but Chinese-owned chipmaker that supplies numerous European carmakers, according to The Economist.
Several European firms warned of production stoppages, and some German companies put workers on leave without pay. Germany's trade deficit with China hit $76.52 billion last year and is expected to surge to around $100.87 billion this year, The Economist reported, driven by collapsing German exports and a rush of imports in categories like cars, chemicals, and machinery that were once German specialties. Chinese brands now account for 20% of Europe's hybrid market and 11% of electric vehicle sales. German cars command just 17% of the Chinese market, down from 27% in 2020.
The rare earth controls were suspended for a year after the US and China struck a trade deal on October 30th, but the EU found itself a bystander to negotiations that directly affected its economy. Writing in the Financial Times, Robin Harding argues that China's explicit goal of self-sufficiency [2]leaves Europe with few options . "There is nothing that China wants to import, nothing it does not believe it can make better and cheaper," he wrote, concluding that large-scale protectionism may be unavoidable if Europe wants to retain any industry at all.
[1] https://www.economist.com/briefing/2025/11/20/chinese-regulations-and-competition-are-panicking-european-manufacturers
[2] https://www.ft.com/content/f294be55-98c4-48f0-abce-9041ed236a44?accessToken=zwAAAZrBQ_FVkdPylL5VmMRI8NOrzpBB7SNqRA.MEUCIBj2LZHatpxrGF6w_BKNjHs3rF1vWi8alhZvJyegGS19AiEAr_H-MVsT4vuZdp4h26_Xepq5n9VRKUm062cMjIuwqEY&segmentId=e95a9ae7-622c-6235-5f87-51e412b47e97&shareType=enterprise&shareId=222f3b38-f2c4-43e6-8638-308be851a198
Europe is discovering what Canada discovered (Score:1)
You can't rely on a huge and unreliable trade partner with interests that might not align with yours. That's the new reality, sadly. And the world will be poorer for the pigheaded (if not bloodthirsty) pursuit of power and influence on the part of the USA, China and Russia.
Re:Europe is discovering what Canada discovered (Score:4, Insightful)
Except that in the case of Canada, there was a great deal of trade in both directions, in terms of commodities and also finished goods. It was a mutually beneficial trade arrangement too. It promoted the US' interests without ham-fisted authoritarian threats. This sort of trade made the US the powerhouse it was. In other words this was a sharp shift in US government attitude from one of friendship to one of an adversary (which is really how all relationships and business deals have ever been done in Trump's life). Sadly there's no going back. The damage is done and the US will never ever recover the good will and trade benefits it once had with its closest allies and trading partners, no matter what a future Democrat does to try to undo the damage, now that Trump's attitude has become the attitude of the GOP.
With China, though, there was no abrupt shift. China's goals have always been clear. The only thing they want from the west in terms of trade is raw commodities and foreign currencies. Whereas the west demands cheap goods, full stop. So China's domination of European industry and economies has been ongoing for years, and it's benefited by European policy and attitudes. China is happy to build high quality items and sell them for a premium, but there's no very little demand from the west. If there was demand, we wouldn't have seen local manufacturing capability disappear in the first place. Tariffs are not going to change these fact.
Re:Europe exported it's polluting industry (Score:3)
Rare earths are not rare. However, processing rare earths are very polluting. By buying these materials from China, Europe doesn't need this polluting industry within it's borders. China can pollute itself for Europe's benefit.
If Europe doesn't want to deal with China, then it either needs to find another source or start processing rare earths within it's own territory and deal with the pollution itself.
Re: (Score:2)
There's always Greenland.
You can't cut off cheap Chinese goods (Score:2, Interesting)
Europe like America gives too much money to its 1%. The only way to maintain their economies is with cheap goods made by slave labor in China. That's the only way to offset increasingly large amounts of money being moved from the bottom to the top.
If you want to fix that you have to cut off the flow of money to the top and we're not going to do that. There's a variety of terrible reasons why that is the case but it just is.
I honestly do not know a solution to prevent human civilization from collapsi
Re: (Score:2)
"Anti-intellectualism and a hatred and disdain for experts dominates discourse now"
If by "now" you mean since the Reagan years...
Re: (Score:2)
> disdain for experts dominates discourse now"
You mean self-appointed experts who know a lot about one subject and think that knowledge exhausts the possibilities. But it is those experts who dominate the discourse. They just think that is the way it should be. Other opinions that disagree with theirs are just stupid and uninformed.
Know-it-alls have always been subjects of disdain because they are unwilling to consider that others may have knowledge and wisdom beyond theirs. And it doesn't matter how knowledgeable and smart they are, that still isn't
Re: (Score:2)
yet the world's lone superpower elected a self-proclaimed know-it-all to the highest office TWICE
Re: (Score:2)
> That overpowering 12-year-old urge to not be told what to do has completely overwhelmed society and I do not know how you push back against that.
Not everyone needs another mom.
Re: (Score:3)
Don't mistake intelligence or education for wisdom. Certainly, don't mistake the pretense of intellect for wisdom. We have had too many "smartest people in the room" presenting complex technocratic solutions that are ultimately just houses of cards. The fruits born by technocrats are rotten. Latin America is awash in examples of it, as are we. The ACA is a prime example of a technocratic solution that was entirely unwise despite having been created by experts from MIT and Harvard. Extraordinarily comp
Re: (Score:3)
> We have had too many "smartest people in the room" presenting complex technocratic solutions that are ultimately just houses of cards.
I think that misses a central problem, their solutions are self-serving. They often ignore both the costs to other people and the restricted range of people like themselves who will benefit. The need for complex solutions is often driven by the need to protect their interests. An, d yes, the ACA is a classic example.
Re: You can't cut off cheap Chinese goods (Score:1)
"increasingly large amounts of money being moved from the bottom to the top."
Do the poor even have the $trillions that the rich want, or does it come from financial markets?
Why not deregulate financial markets and make taxes voluntary so you don't trigger adolescent rebellion in the rich, while printing and indexing a basic income so the poor have enough to live on and pursue their happiness?
Re: You can't cut off cheap Chinese goods (Score:2)
Because that will not pacify the poor. Printing money constantly will cause monetary inflation, so only the rich will be able to buy anything of significant value like homes. You'd have to also give away housing. It makes much more sense just to take the money from the rich and give it to the poor, the rich will end up with it again anyway.
Re: (Score:2)
> Printing money constantly will cause monetary inflation, so only the rich will be able to buy anything of significant value like homes.
That is entirely wrong. We do in fact "print" money constantly. But "printing" additional money will cause "inflation" only if it is not accompanied by an increase in the value of what is available to purchase with that money.
Artificially cheap? (Score:1)
> European manufacturers are facing a two-front assault from China that has German industry associations warning of deindustrialisation: on one side, artificially cheap Chinese goods are flooding into Europe, and on the other, Beijing has demonstrated its willingness to abruptly cut off access to critical inputs like rare earths and semiconductors.
> Germany's trade deficit with China hit $76.52 billion last year and is expected to surge to around $100.87 billion this year, The Economist reported, driven by coll
Re:Artificially cheap? (Score:5, Insightful)
Well for one, China is willing to directly subsidize industries. But even forgetting that, when you aren't meeting the end countries laws re: human rights, safety, production methods, etc, yes, it's artificially cheap as it applies to domestic manufacturers. So if your answer for "Germany needs to adapt" is to adapt China-style laws, then I guess you're right. But that's probably not what we really want here.
Re: Artificially cheap? (Score:1)
Does China allow PFAS pesticides too?
Winning! (Score:2)
Almost as if world trades were humming along just fine and someone decided to take a giant shit in the swimming pool. Now China has this rare earths license nonsense as a direct result of the USA.
Re: Winning! (Score:2)
World trade was headed to destruction. Now it's just heading there a bit quicker.
Just regulate some more (Score:1)
Europe will be ok.
It just needs to regulate some more, ban some more business practices, and keep telling everyone else about how awesome it is.
It will be just FINE!!!!
Now get out there and pass out some more fines!
Re: (Score:2)
The Trump administration seems to think so. Increased government regulation through tariffs will fix it, along with bigger government. Ironic how the GOP has done a complete 180 over the years isn't it.
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If it does another 180, it will be a 360!
Wouldn't that be rad??
Competition (Score:3)
> There is nothing that China wants to import, nothing it does not believe it can make better and cheaper,
And the real problem for Europe may be that they are right. And that would mean that European industry is no longer competitive in the world market. And its not clear there is anything they can do about that.
Re:Competition (Score:4, Insightful)
Well it's a problem or the US too. The last bastion of American industry is heavy equipment including construction and agricultural machines. Interestingly this is also a prime industry for Europe too. A lot of stuff is still made locally. But China is now making their own versions and just beginning to exporting them. And it's a double whammy. They can make them cheaper, but choose to just barely undercut western equivalent products (say by 20%), making a huge profit.
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> Well it's a problem or the US too. The last bastion of American industry is heavy equipment including construction and agricultural machines.
The United State produces more oil than any other country in the world. It still produces plenty of other goods and services that can't be easily produced better and cheaper elsewhere. And there is a lot of US intellectual property that limits the ability of anyone else producing them.
The problem for Europe is not "China", its that they don't produce anything all that special. When people talk about Europe, they aren't usually talking about places like Norway that export oil. Europe has been living off fad
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Then the yuan would rise ...
There is one thing they want to buy, Euro assets ... something which they can only do because the EU allows it.
holy propaganda Batman! (Score:2)
Summary fails to mention:
Rare earth metals restricted in reaction to: US tariffs and chip restrictions.
Nexperia chips freeze in reaction to: Dutch nationalization of Nexperia headquarters.
German deindustrialization also heavily influenced by vastly higher energy costs since 2022.
Here what I expect (Score:3)
Right now, we're noticing that Chinese companies are offering us exploitative deals, and we don't like it, and think that tariffs will fix it. But with tariffs in place, we will find that now it's American companies that are offering us the exploitative deals, but they can charge more now, because they're insulated from outside competition. What I'm saying is that intranational capitalism is just as sleazy and brutal as international capitalism - only less efficient, because it's less competitive.
Dual squeeze? (Score:1)
I thought this was gonna be a tale of two testicles.
Re: (Score:1)
it is. european elites had already fucked up its industrial base in favor of rents and stocks a while ago, then definitely sentenced it to death with project ukraine and who should be to blame now? ofc china. it's testicles all the way.
Re: Dual squeeze? (Score:1)
How in favour of rents and stocks?
Re: (Score:2)
The Washington Stand? Might as well link to Pravda.
Re: Dual squeeze? (Score:2, Troll)
It's not wrong to say that America is largely at fault. We got Ukraine to give up nukes in exchange for vague and non-binding promises that we would protect them from Russia. Obviously this is a deal they should not have taken, but it was our sleazy idea.
Re: (Score:2)
I agree with you about NATO states paying for mercenaries to defend Ukraine. There are many experienced fighters in Africa and the Middle East, and it's likely that their services could be bought at a reasonable price. Without more soldiers in the field, Ukraine's front is doomed to collapse.