Europe and China agree to take action on climate change during tense summit
'In the fluid and turbulent international situation today, it is crucial that all countries, notably the major economies, maintain policy continuity and stability and step up efforts to address climate change,' the joint statement said.
The climate agreement was a silver lining on a stormy day when European leaders demanded a more balanced relationship with Beijing in talks with President Xi Jinping.
They highlighted trade in their opening remarks, calling for concrete progress to address Europe's yawning trade deficit with China.
'As our co-operation has deepened, so have the imbalances,' European Commission president Ursula von der Leyen said. 'We have reached an inflection point. Rebalancing our bilateral relation is essential. Because to be sustainable, relations need to be mutually beneficial.'
Expectations had been low before the talks, initially supposed to last two days but scaled back to one. They come amid financial uncertainty around the world, wars in the Middle East and Ukraine, and the threat of US tariffs. Neither the EU nor China is likely to budge on key issues.
European Council president Antonio Costa called on China to use its influence over Russia to bring an end to the war in Ukraine — a long-running plea from European leaders which is likely to fall again on deaf ears.
Mr Xi called for deeper co-operation between China and Europe to provide stability in an increasingly complex world. Both sides should set aside differences and seek common ground, he said, a phrase he often uses in relationships like the one with the EU.
Beijing is willing to strengthen co-ordination on climate and make greater contributions to addressing climate change, he said, but he pushed back against EU restrictions on Chinese exports.
'We hope the EU will keep its trade and investment markets open, refrain from using restrictive economic and trade tools and provide a good business environment for Chinese companies to invest and develop in Europe,' he said, according to state broadcaster CCTV.
Besides trade and the Ukraine war, Ms von der Leyen and Mr Costa were expected to raise concerns about Chinese cyberattacks and espionage, its restrictions on the export of rare earth minerals and its human rights record in Tibet, Hong Kong and Xinjiang.
The EU, meanwhile, has concerns about a looming trade battle with the US.
Beijing's stance has hardened on the EU, despite a few olive branches, like the suspension of sanctions on European legislators who criticised Beijing's human rights record in Xinjiang province, where it is accused of a widespread campaign of repression against the Uyghurs.
Like the US, the 27-nation EU bloc runs a massive trade deficit with China — around 300 billion euros (£260 billion) last year. It relies heavily on China for critical minerals and the magnets made from them for cars and appliances.
The EU has imposed tariffs on Chinese electric vehicles to support its car makers by balancing out Beijing's heavy subsidies. China would like those tariffs revoked.
The rapid growth in China's market share in Europe has sparked concern that Chinese cars will eventually threaten the EU's ability to produce its own green technology to combat climate change.
Business groups and unions also fear that the jobs of 2.5 million car industry workers could be put in jeopardy, as well those of 10.3 million more people whose employment depends indirectly on EV production.
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New Statesman
38 minutes ago
- New Statesman
How Britain lost the status game
Photo by Stefan Rousseau/AFP I've always been a bit puzzled by the 1956 Suez Crisis. The idea of Britain, France and Israel plotting together but being defeated by the honest, righteous Americans does feel, nearly a lifetime later, a little strange. But the most baffling thing about the Suez Crisis is the idea that it was a crisis. It's always described as this a great national humiliation which ruined a prime minister, the sort of watershed to inspire national soul-searching, state-of-the-nation plays and a whole library of books. And yet, compared to the sort of thing which literally every other European country had to deal with at some point in the 20th century, it's nothing. Britain was not invaded or occupied; Britain did not see its population starve. Britain simply learned that it was no longer top dog. That's all. The event and the reaction don't seem to go together. But this, of course, is to see the world from the perspective of today. Now, we all know that Britain cannot just do what it wants – that the US is the far more powerful player. At the start of 1956, though, large chunks of the map were still coloured British pink (or, come to that, French bleu), and the median opinion at home was that this was broadly a good thing. Suez was the moment when the loss of status we now date to 1945 came home. I wonder, in my darker moments, if we're going through something similar now – a less dramatic decline, perhaps, but a potentially more ruinous one. The loss of empire, after all, was mainly an issue for the pride of the political classes. Today's decline in status affects everyone. Consider the number of areas in which the current British government seems utterly helpless before the might of much bigger forces. It's not quite true to say that Rachel Reeves has no room for manoeuvre – breaking a manifesto pledge and raising one of the core taxes remains an option, albeit one that would be painful for government and taxpayer alike. But her borrowing and spending options are constrained by the sense of a bond market both far flightier than it once was, thanks to an increase in short term investors, and less willing, post-Truss, to give Britain the benefit of the doubt. The thing that much of the public would like Reeves to do – spend more, without raising taxes – is a thing it is by no means clear she has the power to do. Over in foreign policy, Keir Starmer has offended sensibilities by making nice with someone entirely unfit to be president of the United States, and whose actions place him a lot closer to the dictators of the 20th century than to Eisenhower or JFK. The problem for Starmer is that saying this out loud would likely result in ruinous tariffs, or the collapse of NATO before an alternative system for the defence of Europe can be prepared, or both. Again, he has no space to do what his voters want him to do. In the same vein, consider the anger about Britain's failure to act to prevent the horrors still unfolding in Gaza. It is not to imply the government has handled things well to suggest that at least part of the problem is that – 69 years on from Suez – the government of Israel doesn't give a fig about what the government of Britain thinks. The things the public wants may be outside the realm of things the government can actually deliver. Subscribe to The New Statesman today from only £8.99 per month Subscribe Even in less overtly political realms, the British state feels helplessly at the mercy of global forces beyond its control. The domestic TV industry, a huge British export, is in crisis thanks to the streamers. AI will change the world, we're told, and it's very possible that isn't a good thing: and what is Westminster supposed to do about that? And with which faculties? In all these areas and a thousand more, people want their government to do something to change the direction of events, and it is not at all obvious it can. Ever since 2016, British politics has been plagued by a faintly Australian assumption that, if a prime minister is not delivering, you should kick them out and bring in the next one. That is not the worst impulse in a democracy. But what if Britain is so changed that delivery is not possible? Researchers have found that social status affects the immune system of certain types of monkey – that the stress of lower status can, quite literally, kill. It already looks plausible the electorate might roll the dice on Nigel Farage. This is terrifying enough. But when it turns out he can't take back control either, but only trash what's there – what then? [See more: Trump in the wilderness] Related
Telegraph
38 minutes ago
- Telegraph
Trump played the EU at its own game... and won
Squaring off across the table from Ursula von der Leyen was Donald Trump, banging his fists and demanding a 30 per cent blanket tariff. The clubhouse of the Trump Turnberry golf course had become the unlikely setting of a face-off between the two global superpowers – and ultimately, the EU's humiliation. The Telegraph has spoken to insiders who were in the room when the negotiations were taking place and has seen diplomatic notes that paint a clear picture. It's one of Mrs von der Leyen, the European Commission president, bowing to pressure from the US and being beaten at the bloc's own game. She had just agreed to the US imposing 15 per cent tariffs on EU goods entering America, while Britain had come away with a rate of 10 per cent. And at the end of it all, she and her team of EU negotiators had to put their thumbs up, their smiles not reaching their eyes, as they stood next to Mr Trump who boasted of the 'biggest deal ever made'. US officials had played hardball for the weeks and months leading up to the high-stakes showdown. Panicked European officials had turned to their Japanese counterparts for advice before flying to Scotland, asking for their advice on how to be successful like them. But ultimately, the EU was beaten by a dealmaker who played the bloc's game better than they could have played it. Over the years, Brussels has used the size of its single market to reinforce the need for trading partners to make concessions, rather than the other way round in talks over deals. And European leaders have voiced their frustration at the move. France's leaders described it as a 'dark day' for Europe and that the bloc hadn't been feared enough going into the talks. Trump plays hardball After a round of golf, the stage was set for the American negotiating team, including Mr Trump. A no-deal deadline was set for Friday, Aug 1. Without a pact Brussels would be subjected to the 30 per cent tariffs set out by the president in a letter to Mrs von der Leyen just two weeks earlier. European firms doing business in America would have become uncompetitive overnight if the EC president didn't shake hands on a pact. To secure this deal, the German eurocrat was told she would have to stomach a number of concessions, signing on the dotted line of an agreement that would be considered one-sided in favour of the Americans. Brussels also knew this agreement was needed to avert a nastier, more chaotic transatlantic trade war that would have left Europe without its most important ally until at least January 2029, when Mr Trump's second term comes to an end. To achieve this, member states agreed that they would have to stomach a blanket tariff because of a belief that the US president wouldn't settle without one, a source familiar with the negotiations told The Telegraph. Maros Sefcovic, the EU's trade commissioner, had briefed capitals that they simply wouldn't be able to do business in the US if that tariff rose to the 30 per cent demanded by Mr Trump. Therefore, they needed to settle on a number that would be an increase on the status quo originally charged on European imports into America – 14.8 per cent, according to one official. Some might argue that this was the EU being made to take a taste of its own medicine, with the bloc usually the first negotiator to reach for hard deadlines and use its size and strength to extract concessions from prospective partners. And it worked, the bloc had blinked. Before Mrs von der Leyen headed to Scotland, European capitals signed off on a mandate, perhaps for the first time, that would use a trade deal to increase tariffs from the current number. Behind the scenes For 24 minutes, the US President and the commission chief held an impromptu press conference under the eight chandeliers in the glamorous ball room at Trump Turnberry. With the Brussels and White House press packs ushered out, the real talks could begin. Mr Trump opened with his gambit of 30 per cent tariffs on all European products imported into America. The commission's first offer was 'high single digits', a source briefed on the wrangling said. The White House delegation stood firm as their European counterparts began slowly ratcheting their number closer to the American's figure. But ultimately, the commission's team kept their cool, at the recommendation of the Japanese, the most recent country to sign an agreement with the US. The Telegraph can reveal that a top aide to Mr Sefcovic had reached out to his Japanese counterpart for help on handling the Americans before the talks. 'They come in shouting the high number, and all you have to do is hold your cool and they diminish as you push back,' a source said, describing the advice. The other tactic deployed by the Europeans was to woo Mr Trump with some large numbers presented to him on a single sheet of A4 paper. Eurocrats had used their build-up to prepare an offer on paper that the US president would see as a major victory. That was an offer to buy billions of dollars worth of American military technology – born out of Nato's recent decision to increase defence spending to 5 per cent of GDP. The EU pledged to purchase $750bn (£565bn) worth of energy from the US over the next three years. And then there was a further promise that European companies would invest $600bn (£452bn) by 2028. These, European officials claim, are non-binding, not really worth the paper they were written on. The numbers were calculated using publicly available order information and information from trade associations. But this was enough to convince Mr Trump to settle at a tariff rate of 15 per cent, covering about 70 per cent of EU exports and totalling about €780bn (£588bn) worth of trade. In return, US imports into the EU will not face higher tariffs. 'This is probably the biggest deal ever reached in any capacity, trade or beyond trade,' Mr Trump declared. 'It's a giant deal,' he added, referring to the $600bn and $750bn promises. 'That's going to be great.' The US president's claims of victory and the deal were met with derision in Europe. Emmanuel Macron, the French president, said the bloc hadn't been 'feared' enough in the talks, which opened the door to the concessions. François Bayrou, Macron's prime minister, described it as a 'dark day' for Europe and accused the Commission of bowing to American pressure. Michel Barnier, the EU's former Brexit negotiator, said accepting tariffs was an 'admission of weakness'. 'This weakness is not inevitable. It results from poor choices that ensure neither the sovereignty nor the prosperity of the continent and its states,' he wrote on social media. Friedrich Merz, the German chancellor, meanwhile said it would cause 'considerable damage' to his country's economy, the largest in the Eurozone. In comparison, Britain had negotiated a tariff rate of 10 per cent, five less than the EU, in its own deal with Washington. This was hailed by Brexiteers as evidence that leaving the bloc was the right thing to do. Paris and Berlin had been the two capitals pushing hardest for the bloc to take a more robust stance in the trade talks. The French had especially pushed for a package of €93bn (£81bn) of retaliatory tariffs to be unleashed to bring Mr Trump and Washington to heel. There were also calls from Paris to clamp down on American tech firms doing business in Europe. 'This was a big red button nobody was willing to push,' an EU diplomat told The Telegraph, spelling out fears that Europe's economy is reliant on American payment services. But Mrs von der Leyen, who was particularly dovish, argued that this would spill over into other sectors and potentially spell an end to what is a crucial alliance for Europe, especially in security. Fears that the White House and Pentagon would withdraw security guarantees for Europe and cut off weapons supplies to Ukraine overshadowed the talks. But the commission president and her top officials also steeled member states for a longer-term game. Devil in the detail Gabrielius Landsbergis, a former Lithuanian foreign minister, said: 'The only way I can explain to myself why the EU commission would choose to humiliate Europe by accepting the 15 per cent tariff is that they hope to appease Trump enough for him to maintain US security commitments in Europe.' Now Mr Trump has his victory, the devil would be in the detail as the terms are finalised, Mrs von der Leyen's team told member states. The commission will be looking to quietly enlarge a list of products that are exempted from tariffs in more technical talks with Washington. Eurocrats are already briefing that Britain's deal, despite having a lower tariff rate, doesn't protect key European industries, such as beef farmers.
The Guardian
2 hours ago
- The Guardian
Europe's trade deal with the US was dead on arrival – it needs to be buried. Here's how to do it
Ursula von der Leyen's Turnberry golf course deal has been rightly called a capitulation and a humiliation for Europe. Assuming such an accord would put an end to Donald Trump's coercion and bullying was either naive or the result of a miserable delusion. The EU should now steel itself and reject the terms imposed by Trump. Is this deal really as bad as it sounds? Unfortunately, it is, for at least three reasons. The blow to Europe's international credibility is incalculable in a world that expects the EU to stand up for reciprocity and rules-based trade, to resist Washington's coercion as Canada, China and Brazil have, rather than condoning it. Economically, it's a damaging one-way street: EU exporters lose market access in the US while the EU market is hit by more favoured US competition. Core European industrial sectors such as pharma and steel and aluminium are left by the wayside. The balance also tilts in the US's favour in important sectors such as consumer goods, food and drink, and agriculture. Tariffs tend to stick, so this is long-term damage. The EU even gives up its right to respond to future US pressures through duties on digital services or network fees. To top it off, von der Leyen's defence and investment pledges (for which she had no mandate) go against Europe's interest. The EU's competitiveness predicament is precisely one of net investment outflows. As international capital now reallocates under the pressures of Trumponomics and a weakening dollar, the case for Europe to become a strategic investment power was strengthening. Von der Leyen's promise of $600bn in EU investment in the US is therefore disastrous messaging. How could this happen? All EU member states wanted to avoid Trump's 30% tariff threat and a trade war, but none perhaps as much as Germany and Ireland, supported by German carmakers and US big tech firms. Yet Irish sweetheart digital tax deals, as well as BMW and Mercedes's plans to move production hubs to the US (also to serve the EU market), cannot be Europe's future. EU governments were distinctly unhelpful in building the EU's negotiating position. But in the end, it was von der Leyen who blinked and she has to take responsibility. Her close team took control in the closing weeks and went into the final meeting manifestly prepared only to say yes, which made Trump's steamrolling inevitable. Let's think of the counterfactual: if von der Leyen had stepped into the room and rejected these terms, Trump's wrath and some market turmoil may have ensued. But ultimately it would very likely have come to a postponement, a new negotiation and, at some point, a different deal that would not be so lopsided or unilaterally trade away deep and long-term European interests and principles. Instead, von der Leyen became a supplicant to a triumphant Trump. The situation is reminiscent of the final rounds of the Brexit negotiations five years ago when von der Leyen similarly was giving in to unacceptable demands from Boris Johnson, only to U-turn under pressure from a steelier EU chief negotiator and a quartet of member states. Today, von der Leyen runs Brussels with a strong presidential hand and has largely done away with internal checks and balances inside the commission. That is her prerogative and her style, but the upshot should not be weak, ineffective and unprincipled dealings on Europe's major geopolitical challenges, from Trump to Gaza. The 'deal' in Scotland is in reality an unstable interim accord. Nothing is yet inked or signed; Washington and Brussels are already locking horns on its interpretation and negotiations on the finer (and broader) points are ongoing. The 27 EU governments will inevitably get involved as the final deal needs to be translated into an international agreement and EU law. Some big powers – Germany and Italy seemingly – are on board, reluctant or not. However, internal political dynamics may change their calculations. Opposition parties and rightwing contenders who are a real political threat to leaders in Germany and France are already lambasting the deal. Unless von der Leyen strikes a dirty bargain with the member states, the European parliament will also have a say. The longtime chair of its trade committee, Bernd Lange, has set the tone for how the deal would be viewed there, calling it 'asymmetry set in stone' and even 'a misery'. As details seep out on what von der Leyen has really agreed toand what the US expects from the EU, and all the consequences become clear, an already unpalatable deal may become even more so. Weakening US economic data and returning stock market jitters show that Trump's negotiation footing is fragile. His new tariff threats come with new extensions, up to 90 days in the case of Mexico, as his position is overstretched. For Europe, the lesson from the Brexit negotiations – one that von der Leyen ought to have grasped before now – is that nothing is agreed until everything is agreed. There is now an opportunity for EU governments and the European parliament to course correct and salvage something from this train wreck. Georg Riekeles is the associate director of the European Policy Centre, and Varg Folkman is policy analyst at the European Policy Centre
