BUDAPEST, Hungary (AP) — The European Union risks entering an “economic cold war” with China, Hungary’s prime minister said Friday, pledging to vote against an EU plan to impose higher tariffs on Chinese imports electric vehicles.
EU countries will vote on Friday on whether to finalize the tariffs, part of a wider trade dispute over Chinese government subsidies and Beijing’s booming exports. green technology to the bloc of 27 countries.
The rates are expected to pass the vote. But Hungarian Prime Minister Viktor Orbán said on Friday his country would oppose this, warning that Europe’s tendency towards economic protectionism would destroy the EU’s economy.
“What they are making us do, what the European Union is doing, is an economic cold war,” Orbán told state radio. “This is the worst thing that can happen to Europe. … If this continues, the European economy will die,” he said.
The EU in July the provisional rates imposed up to 37.6% on electric cars made in China, claiming they unfairly benefit from government subsidies. Beijing has responded filed a complaint with the World Trade Organization in August, saying the tariffs violate WTO rules and undermine global cooperation on climate change.
China has also launched retaliatory investigations into French cognac exports European pork in what some analysts fear could turn into an economically damaging trade war with the EU.
Under Orbán, Hungary has maintained close ties with China and Russia, while its Western partners increasingly seek to distance their economies from those countries. Moscow’s war in Ukraine and fears that a flood of cheap Chinese products could disrupt Western markets have accelerated these efforts.
Meanwhile, Hungary has sought major investment from Beijing and opened a series of Chinese EV battery factories across the country. At the end of last year, it announced that BYD, one of China’s largest EV manufacturers, will open its first European production plant in southern Hungary.
Orbán said on Friday that EU protectionism represents a “great danger” to Hungary’s export-oriented economy. His government has declared a policy of “economic neutrality” that favors trade with all willing countries, regardless of alliances or geopolitical considerations.
He said Western partners, including the EU, have “attacked” Hungary for its policies to “divert it from the path of economic neutrality.”
“What is behind every attack is that they are trying to force Hungary into the bloc where they are, where I think there is no growth, no development, no future,” he said.