BUDAPEST, Hungary (AP) — The European Union risks entering an “economic cold war” with China, Hungary’s prime minister said on Friday, pledging to vote against an EU plan to impose higher tariffs on the import of Chinese electric vehicles.
EU countries are set to vote on Friday whether to finalize the tariffs, part of a broader trade dispute over Chinese government subsidies and Beijing’s burgeoning exports of green technology to the 27-nation bloc.
The tariffs are expected to pass the vote. But Hungarian Prime Minister Viktor Orbán said on Friday that his country will oppose them, and warned that Europe’s tendency toward economic protectionism would destroy the EU’s economy.
“What they’re 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 imposed the provisional tariffs of up to 37.6% on EVs made in China, saying they unfairly benefit from government subsidies. Beijing, in response, filed a complaint with the World Trade Organization in August, saying the tariffs violate WTO rules and undermine global cooperation on climate change.
China also launched retaliatory investigations into French cognac exports and European pork in what some analysts fear could develop into an economically harmful trade war with the EU.
Hungary under Orbán has pursued 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 inexpensive Chinese products could disrupt Western markets have accelerated those efforts.
Meanwhile, Hungary has sought major investment from Beijing, opening a series of Chinese EV battery manufacturing plants across the country. Late last year, it announced that BYD, one of China’s largest EV makers, will open its first European production factory in southern Hungary.
Orbán on Friday said that EU protectionism represented a “huge 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 had “attacked” Hungary over its policies in order to “divert it from the path of economic neutrality.”
“What’s behind every attack is that they’re trying to … force Hungary into the bloc where they are, where I think there is no growth, no development, no future,” he said.
Justin Spike, The Associated Press