The ever-expanding action of the EU against subsidies, except its own

Juhi Dion Sud and Edwin Vermulst

Chapter 10 in A Research Agenda for Global Power Shifts and International Economic Law, 2025, pp 251-272 from Edward Elgar Publishing

Abstract: The anti-subsidy (AS) instrument has been the key tool through which the European Union (EU) has addressed subsidization by trading partners. Since 2010, the EU has intensified its use, especially against China, and significantly expanded the scope of the subsidies countervailed to cover, among others, input subsidies, investments of Chinese companies in third countries, and consumer subsidies. Recently, the EU initiated its first ex officio AS investigation concerning battery electric vehicles (BEVs) from China, and imposed duties ranging between 7.8–35.3 percent, even though the EU is itself subsidizing the European BEV supply chain. In December 2022, the EU additionally adopted the Foreign Subsidies Regulation to counter third-country subsidies allegedly affecting competition in the EU's internal market, and which cannot be addressed under the World Trade Organization Agreement on Subsidies and Countervailing Measures. However, there is a lack of coordination and balance between the EU's policy and actions, such as between its hostile trade policy on the one hand, and its subsidization of the EU industry for the same products on the other hand; between protecting EU producers from global competition on the one hand, and achieving climate goals and defending consumer interests on the other hand; between protecting trade and competition on the internal market on the one hand, and jeopardizing EU companies’ exports and global operations on the other hand. The aggressive use of the AS instrument without proper economic analysis and coordination with other EU objectives risks undermining EU companies’ internal and external growth.

Keywords: Subsidies; Anti-subsidy duties; Countervailing duties; Third-country subsidies; Foreign Subsidies Regulation; China; Decarbonization; Battery electric vehicles; Foreign direct investment (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035311491
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