| With the European Commission’s announcement to investigate whether China is unduly supporting its burgeoning electric vehicles industry, the enthusiasm with which politicians embrace protectionism is becoming worrisome. Europe, where banana imports from the bloc’s former colonies once enjoyed preferential terms, has learned one important lesson in its storied history: Free and fair trade is the foundation of wealth. Similarly, the EU once learned that when the state dictates to industry, it tends to fail. Increasingly, however, these lessons seem lost. “We want a European Green Deal, not a Chinese one,” said Manfred Weber, the leader of the European Parliament’s largest political group, the conservative European People’s Party, while addressing the bloc’s increasingly powerful legislative body. What Commission President Ursula von der Leyen merely alluded to in her State of the European Union speech last Wednesday – anti-dumping tariffs on Chinese EVs – Weber whipped into a broadside against Beijing. “The European Union must not be naive,” he told ZDF: “Anyone who sees today’s prices knows that the Chinese are subsidising their electric cars.” His questionable analysis aside – state support for industry is commonplace anywhere – the Bavarian politician appears to be motivated by a devotion to “his” nation and the automobile, rather than defending the benefits for consumers and the European citizens, as he ought to. Remember that alleged Chinese subsidies to EV producers are a direct welfare transfer to EU consumers (and the shareholders of carmaker BYD). Few European companies produce cheap and affordable EVs – a gap that the newcomers are too happy to fill. | 
The Roundup
