EU looks to fix its China headache as ethical questions grow at home

European Union leaders are working around the clock to resolve a growing trade dispute with China, which has left the bloc caught between Beijing and Washington.

The trade tensions began when China imposed strict limits on the sale of rare earth materials to other countries. This move followed similar steps taken by the United States against China. Many European companies need these special minerals to make electric cars and military aircraft.

The situation worsened when the Netherlands acquired a computer chip company called Nexperia from its Chinese owners. China fought back by stopping sales of Nexperia computer chips that were finished in Chinese factories. This has worried European car makers and other businesses that depend on these chips for their products.

EU officials are now attempting to rectify the issue. Olof Gill, who speaks for the European Commission, stated that a group of “high-level technical experts” from China will visit Brussels on Thursday. He added that preparation talks already started yesterday.

Trade tensions escalate over rare earths and chips

European Commission President Ursula von der Leyen announced over the weekend that she has a new plan to produce more rare earth materials in Europe and source them from various countries.

She has not shared the details yet. Von der Leyen also suggested the EU might use its strong anti-coercion tool if needed. French President Emmanuel Macron brought up this same idea during a European meeting last week, according to several EU officials.

German foreign minister Johann Wadephul went to Brussels yesterday to work with the commission after he called off a planned trip to China because of the growing problems.

“Protectionism is spreading,” Wadephul told reporters after the meetings. “Global tariffs and trade conflicts, as well as seemingly arbitrary export restrictions and export licensing procedures, threaten global free trade and thus, of course, the foundation of our prosperity.”

He said it was “crucial for German and European companies that we quickly find sustainable solutions, especially for the smooth supply of rare earths and computer chips.” But Wadephul seemed hopeful about reaching a deal with China. “We are committed to ensuring that fair trade with China remains possible in all areas, including rare earths and chips,” he said.

US officials now think China will wait longer before putting the rare earth export controls in place, after trade talks over the weekend in Malaysia. “We are still ready for this fair exchange and this fair trade, and believe that we will also have partners again in Beijing,” Wadephul said. He added that he would talk to his Chinese counterpart Wang Yi “soon” and set up another visit.

Ireland faces scrutiny over privacy regulator appointment

In the meantime, Brussels has been asked to investigate Ireland’s appointment of a former technology company lobbyist to a key privacy position. The Irish privacy regulator is very important in Europe because many tech companies, including Google, Meta, and TikTok, have their main offices in Dublin.

Last month, the regulator picked former Meta lobbyist Niamh Sweeney as one of its three data protection commissioners. The choice has angered civil rights groups. “We now literally have a US big tech lobbyist policing US big tech for Europe,” said privacy activist Max Schrems.

The Irish Council for Civil Liberties has now filed a formal complaint with the European Commission. The Financial Times saw the complaint, which says Ireland broke EU law. The complaint looks at how Sweeney was chosen, which ICCL says did not have the right protections against conflicts of interest and political interference.

It also points to reports about a lawyer who worked for Big Tech companies and was part of the state group that picked Sweeney. She used to lead lobbying work for Facebook and WhatsApp in Ireland and Europe. “We expect the European Commission to act against Ireland to ensure that it upholds European law,” said Johnny Ryan, a senior fellow at ICCL.

Join a premium crypto trading community free for 30 days - normally $100/mo.