The European Commission chief said she was “convinced that if the competition is fair” from China, then Europe “will have thriving durable economies”. But she said the “imbalances” caused by state support for Chinese industry leading to cut-cost products threatened jobs in Europe, and that was “a matter of great concern”. “Europe will not waver from making tough decisions needed to protect its economy and security,” she said.
They (the EU) want to achieve a goal… stop the Chinese government from financially helping a company allowing them to undercut competitors and bankrupt competitors who do not get government aid.
If you want to influence behavior you have to show where you want the other party to go. So you don’t hit other sectors that do not have this aid… because that would be unfair.
Game theory 101… tit for tat. They help a sector, we fine that sector.
All companies working in the energy and transport sector receive vast subsidies and financial help from whatever country they are located in.
This isn’t about unfair practices, since it’s literally a common practice. This is to protect oil companies and the car makers who took bribes instead of pivoting and are now feeling that decision.
No it is not. The EU asked for information from the companies to show how they come to their prices and they chose not to comply.
Drawing comparison to another sector is not helpful as what is common for one sector is not for the other and leads to unfair advantage.
It’s not a “fine” but a XIX century protectionistic measure which is unlikely to help anyone (except making people poorer because higher prices mean higher expenditure for consumers). And from here to the next inflation spiral there is just a small step…
If a government helps a company from their country artificially lower their prices, that causes an unfair advantage to their competitors. And the competitors go bankrupt, the surviving government sponsored entity is then a monopolist able to increase the prices as they want. And the jobs are gone. So how does that fit I to your view on things?
And you are right, it is not a fine, it is a tarrif. But for the explanation the word fine worked better to explain it I thought.
I don’t think there is a solution for European economy. Better be prepared for the worst rather than living with the illusion that these tricks may work.