Six Reflections on China Arising from the European Energy Crisis

【Answer 1】 Even before the outbreak of the Russia-Ukraine conflict, the United States had been vigorously urging Germany to abandon the already-completed Nord Stream 2 pipeline and had imposed sanctions on companies and individuals involved in its construction. After the conflict erupted, Germany decided to suspend the certification process for Nord Stream 2’s commissioning. Abandoning a pipeline built at a cost of $11 billion was not Russia’s decision. From an energy perspective, severing the close natural gas ties between Europe and Russia serves not only to disrupt their economic interdependence and exclude Russian pipeline gas and LNG (liquefied natural gas) from the European market, but also to promote expensive U.S. LNG. In my speech at ONS, I used tap water and bottled water as metaphors for pipeline gas and LNG, pointing out that replacing tap water with bottled water to meet everyday needs is simply unrealistic. ・ Thirdly, pursuing an extreme path of climate-change-related political correctness. In Europe, climate change has become somewhat akin to religion: everyone must believe in it, and the more extreme the measures, the better—this holds true in Norway, Denmark, the UK, Germany, and France alike. Supporting radical climate policies is mandatory; any questioning is taboo. Political correctness easily breeds ‘groupthink syndrome,’ suppressing voices outside mainstream thinking and often resulting in irrational decisions. ・ Fourthly, decoupling—occurring in several dimensions: First, politics becoming divorced from science. Politicians largely follow public opinion and prioritize votes, causing their decisions to drift ever further from scientifically grounded policymaking. Second, policy formulation becoming disconnected from implementation. Many staff members at the European Commission—including senior managers—lack corporate work experience; when drafting documents or announcing decisions, they remain unaware of how those decisions will impact business implementation, thereby creating a gap between decision-making and execution. Third, ideology becoming severed from economic interdependence. Russian energy and the European economy are mutually dependent, yet political correctness forcibly tears apart these two interdependent economies—inevitably inflicting massive losses and suffering. The impacts manifest in four areas: ・ First, severe damage to livelihoods, industry, and the broader European economy. On September 6, 2022, trade associations representing 12 energy-intensive industries—including cement, glass, steel, fertilizers, mining, and chemicals—jointly issued an open letter to European Commission President Ursula von der Leyen, warning that soaring natural gas and electricity prices not only fuel inflation affecting consumers, but also deliver a devastating blow to industrial users of gas and electricity. For many energy-intensive sectors, continuing production in Europe has lost all commercial viability, and further investment is no longer feasible. Shutdowns of related production capacity are already severely disrupting supply chains, threatening Europe’s industrial base and the supply of essential goods. ・ Second, political instability across multiple countries. Italy appointed an ultra-right-wing female Prime Minister; the UK installed a more radical female Prime Minister who resigned after just 45 days in office. Mass protests erupted in the Czech Republic; demonstrations broke out in Germany; and major strikes occurred in France—the European winter ahead promises no calm. ・ Third, the reshaping of Europe’s energy markets. Europe’s electricity and natural gas markets were originally designed around competition, premised on abundant supply to drive down costs. Now the situation has reversed—severe shortages prevail. In an era of scarcity, how should competitive electricity and natural gas markets operate?

What trade policies and rules govern the European market?

【Answer 2】 The European Union’s tariff nomenclature is based on the World Customs Organization (WCO)’s Harmonized System (HS) of commodity descriptions and coding. Its harmonized codes consist of eight digits, with the first six digits corresponding to HS headings. The EU further employs 10-digit codes—known as TARIC (Integrated Tariff of the European Communities) codes—for regulatory purposes, enabling differentiation and identification of imported products subject to specific policy measures. TARIC codes typically incorporate four additional digits, respectively indicating: agricultural compound products, anti-dumping duties, dual-use items, and export subsidies. All EU Member States apply this unified terminology. The EU publishes its updated tariff schedule annually via Commission Implementing Regulations. EU tariff collection methods are relatively complex. While most products are subject to ad valorem duty rates, certain agricultural products, chemical goods, as well as salt, glass, and watch components are subject to compound duties, mixed duties, or other technically defined non-ad valorem tariffs. Within mixed duties alone, the EU applies seven distinct tariff calculation methods. Moreover, the EU imposes various technical tariffs on certain agricultural products—including seasonal tariffs. Additionally, the EU operates autonomous tariff suspensions and quota systems. These mechanisms fully or partially exempt certain imported goods from normal customs duties. When applied to limited quantities of goods, the mechanism constitutes a quota; when applicable without quantity restrictions, it qualifies as a tariff suspension. In principle, such schemes apply exclusively to raw materials and semi-finished goods unavailable within the EU—and do not cover finished products. The EU levies identical value-added tax (VAT) and excise duties on both imported and domestically produced goods. Although the EU formulates and advocates a uniform VAT rate of 15%, individual Member States retain autonomy in setting their own VAT and excise duty rates. The EU imposes anti-dumping duties or countervailing duties on dumped or subsidized imports from third countries. The EU simultaneously applies both non-preferential and preferential rules of origin. Non-preferential rules are explicitly stipulated in the EU’s Common Customs Tariff and its implementing regulations; preferential rules derive from bilateral or multilateral trade agreements and arrangements concluded between the EU and its trading partners. Non-preferential rules serve primarily for trade remedies, import monitoring or restrictions, export tax rebates, and trade statistics. Goods benefiting from preferential origin treatment require a certificate of origin. Preferential rules permit cumulation—that is, inputs originating from countries enjoying preferential origin status may be treated as originating in the exporting country. The following table presents average EU tariff rates for major product categories: Table 3-1: Average EU Tariff Rates by Product Category Product Category — Average Tariff Rate (%) Foodstuffs — 4.4 Food and Live Animals — 4.8 Rapeseed and Nuts — 4.9 Animal and Vegetable Oils — 0 Agricultural Production Materials — 0.4 Products and Metals — 0.7 Iron and Steel — 2.3 Non-Ferrous Metals — 0.5 Fuels — 0.3 Chemical Products — 3.4 Non-Chemical Products — 4.6 Leather — 2.1 Textiles — 5.3 Fabrics — 7.3 Footwear — 6.5 Other Items — 0.1 Overall Average — 2.5 Given that EU import duty rates for certain products frequently change, users seeking up-to-date tariff information for specific products at specific times should consult the European Commission’s Directorate-General for Taxation and Customs Union TARIC database at: ec.europa.eu/taxation_customs/dds/tarhome_en.htm.

EGA Warns EU Scrap Duty Reversal May Impact German Expansion

5 days ago

Emirates Global Aluminium expressed concern that the EU's withdrawal of a proposed aluminium scrap export duty could delay its planned recycling capacity expansion in Germany.

reuters

2026-09-16

EGA Warns EU Scrap Duty Reversal May Impact German Expansion

EGA Warns EU Scrap Duty Reversal May Impact German Expansion

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