Welcome to the 58th issue of the CEEasia Briefing.
In this issue, we dissect the following topics:
- More on EU tariffs on China-made EVs
- Slovak Prime Minister visits China
- North Korea deploys troops to Russia
- Taiwan’s Tsai Ing-wen visiting Europe
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1. More on EU tariffs on China-made EVs
What is going on… The EU is preparing to introduce additional tariffs of up to 35% on electric vehicles (EVs) manufactured in China, marking a critical shift in its approach to trade with Beijing. In early October, 10 out of 27 EU countries voted in favor of imposing the new tariffs that follow a lengthy investigation into subsidies for Chinese EVs backed by France, Italy, Poland, and the Netherlands, among others. The tariffs echo a similar approach taken by the United States and Canada, which implemented 100% levies earlier this year.
Going deeper… The duties, which are anticipated to take effect by October 31 and could be enforced for five years, showed a notable divide among member states. In particular, Germany, Hungary, and Slovakia have advocated for a cooperative approach with China due to their reliance on car exports. Germany is concerned about potential Chinese retaliation in the form of tariffs on its own automakers, including BMW, Volkswagen, and Mercedes.
As expected, China did not wait long to respond and has decided to introduce retaliatory duties on European goods such as cognac, pork, dairy products, and gasoline-powered cars with large engines. For brandy, tariffs on exports to China are set to increase by 35% as a provisional deposit. France is likely to be the most affected by this decision; China imported up to 99% of the spirit from France last year, generating around €1 billion in revenue. Beijing, however, refrained from directly connecting these decisions to the EU’s actions, as the World Trade Organization (WTO) prohibits trade retaliation without prior authorization. France has stated that it will contest Beijing’s actions at the WTO.
This means… The EU and China are still holding additional technical discussions to explore alternatives to tariffs such as minimum price commitments from Chinese manufacturers or increased investments in Europe. However, China has reiterated its warning to the EU that holding separate negotiations with EV companies during ongoing discussions would “undermine mutual trust.” The imposition of tariffs shows that the EU has adopted a tougher stance toward Beijing while not fully aligning with the US’s goal of decoupling from Chinese EVs. The vote, however, demonstrated continuing divisions between EU’s member states regarding policy on China.
2. Slovak Prime Minister visiting China
What’s going on? Slovak Prime Minister Robert Fico hasa traveled to China at the turn of October for a six-day state visit along with an 80 member delegation which included eight ministers and over 70 business representatives. The visit was the most sizable outgoing trip and signals the current direction of Slovak foreign policy.
Going deeper… The delegation will be in China until 5 November. PM Fico will meet his counterpart Li Qiang and President Xi Jinping, among other high-ranking officials, travel to Hefei to visit Gotion headquarters and deliver a lecture at the Anhui University. The last stop also includes Shanghai, where the delegation will participate at the China International Import Expo (CIIE 2024). A point of discussion includes Russia’s war in Ukraine and its resolution. However, the linchpin of the visit was strategic cooperation in trade and investments.
This means… The mega visit is in line with the diplomatic and foreign policy turn installed after the current Slovak cabinet was elected last autumn. The government claims its foreign policy orientation towards all sides, but in fact is tilted heavily pro-China and pro-Russia while being EU-skeptical. Earlier warm relations with Taiwan (between 2020 and 2023) are now frozen and the PM sees the China visit as a milestone in the renewal of the mutual cooperation, along with planning another state visit to Moscow next year.
In addition… the visit was most likely intended to boost trade and attract more Chinese investment flows into production capacities and infrastructure, as the Chinese-Slovak Gotio-InoBat tandem develops a battery plant in southern Slovakia. The project is so far the biggest EV battery plant and the second biggest investment in Slovakia. In a sign of this, PM Fico openly criticized the EU’s move to introduce additional tariffs on Chinese EVs earlier this month and shortly before his trip said that there are no outstanding issues in Slovak-Chinese bilateral relations.
Still… China’s Ministry of Commerce is reportedly studying measures to impose tariffs on imported large-displacement fuel vehicles. If imposed in the future, they would disproportionately backfire on Slovakia and Germany both voting against the EU duties on Chinese EVs. Whether the prime minister has raised the issue during his trip to China is so far unknown.
3. North Korea sends troops to Russia
What’s going on? NATO Secretary General Mark Rutte confirmed that North Korea has sent its troops to Western Russia, breaching UN Security Council resolutions. North Korean special operations forces have been deployed to the Kursk Oblast, bordering Ukraine. The exact number of troops deployed is not clear, but according to US authorities estimates this has now reached 10,000 troops. These have been reportedly deployed to multiple locations, where they receive training for Russian military equipment.
However… Ukrainian media previously informed that six members of North Korean armed forces were killed in a Ukrainian missile attack in early October. And Seoul is now urging for “immediate withdrawal of North Korean forces” from Russia and Ukraine, and even announced a possible revision of its stance on not supplying lethal weapons to Ukraine. Meanwhile, Moscow dismissed North Korean involvement in the Ukrainian conflict as “fake news“.
Going deeper… Until October, North Korea has been known to supply Russia with ammunition and conventional weapons. However, this summer, on the occasion of Vladimir Putin’s visit to Pyongyang, Russia and North Korea signed a defense agreement that stipulates mutual military support if one of the two countries is attacked. Later, on August 6, Ukrainian forces carried out an attack inside Russia’s Kursk Oblast, which could be used as an excuse by Putin to get North Korean troops involved.
For Ukraine and NATO, this means… bad news. According to Mark Rutte, the deployment of North Korean troops in the conflict is “a sign of Putin’s growing desperation”, and might be a sign of Russia’s exhaustion. However, the involvement of a third nation in the conflict constitutes a serious threat of escalation. In addition to North Korean support potentially placing Ukraine in disadvantage in terms of manpower, it also limits its ability to negotiate. Ukraine’s allies, especially the US, may now be even more reserved in their military support in fear of a larger conflict, involving East Asia, where they have interests.
For North Korea, this means… In return for its manpower supplies, North Korea is most likely getting cash and military technologies from Russia. And as a US Army’s official noted, North Korean army can also get the first real-time combat experience since the Korean war, and feedback on its weapons. This can give Kim Jong Un confidence, leading to more aggressive provocations on the Korean Peninsula. However, a North Korean attack on South Korea with Russian support still remains unlikely, especially as Russia is currently concentrating it efforts (and North Korean forces) in Ukraine.
4. Tsai’s Europe Visit: Focus on Czechia
What’s going on… Former Taiwan President Tsai Ing-wen visited Europe, specifically Czechia, France, and Brussels, this month. Tsai’s choice of Europe as her first overseas trip destination since leaving office in May is symbolic and aligns with her longstanding foreign policy strategy of diversifying Taiwan’s international relations, particularly developing ties with Czechia.
Going deeper… In Prague, Tsai spoke at the Forum 2000 conference, a democratic platform founded by Václav Havel. During her visit, she met with high-ranking Czech officials like Senate President Miloš Vystrčil and Chamber President Markéta Pekarová Adamová, as well as briefly interacted with President Petr Pavel.
Beyond symbolic gestures… Tsai’s visit further developed academic and industrial initiatives; she participated in a debate at Charles University, which has collaborated with Taiwan’s National Chengchi University on the Supply Chain Resilience Centre launched last autumn. In the week following Tsai’s departure, Taiwan and Czechia also unveiled the Advanced Chip Design and Research Center in Brno, enhancing semiconductor ties through a collaboration involving Brno’s Masaryk University and Czech Technical University in partnership with Taiwan’s National Applied Research Laboratories.
This means… Tsai’s visit highlights Taiwan’s strategic efforts to build alliances in Central Europe, a region where democratic values resonate and align with Taiwan’s concerns over authoritarian influences. This positions Taiwan as an important player in European supply chains, particularly in technology and semiconductors. Czechia has been a consistent partner, regularly inviting Tsai since her first appearance in 2004 and hosting her through pre-recorded speeches at the Forum 2000 during her presidency. While Slovakia previously mirrored this support, its new pro-China administration has shifted its stance. However, pro-Taiwan Slovak MEP Miriam Lexmann, a vocal advocate for Taiwan’s democracy, hosted a reception at the European Parliament in Brussels, where Tsai also met with Italian Vice President of the European Parliament, Pina Picierno.
However… Taiwan’s security has been tested in every possible way this month. China condemned Tsai’s visit, urging Czechia to respect the ”One China” principle and conducting military drills near Taiwan following Taiwanese President Lai’s National Day speech on 10 October. Tsai’s diplomatic outreach aligns with European Parliament resolutions condemning Chinese intimidation of Taiwan on October 24, which potentially signal growing European support for Taiwan amidst rising regional tensions.
Quick takes on CEEasia developments
TAIWAN | Taiwan’s National Science and Technology Council Minister, Wu Cheng-wen, confirmed that TSMC is planning to establish new fabrication plants across Europe, even though no additional specific locations or new investment plans have been announced yet.
CHINA/TAIWAN | The European Parliament on October 24th passed a resolution condemning China for the misinterpretation of the UN resolution 2758, its military drills, increasing tensions around Taiwan and obstructing Taiwan’s participation in international organizations. The resolution was passed by an overwhelming majority of 432 parliamentarians in favor, 60 against, and 71 abstentions.
INDO PACIFIC | The NATO Defence Ministers Meeting on 17 October was expanded for the first time to include partners from the Indo-Pacific: Australia, Japan, South Korea, and New Zealand. Ministers discussed areas such as cyber defense, countering disinformation, and harnessing new technologies, including AI, as well as support for Ukraine.
INDIA | German naval ships carried out a joint exercise with the Indian Navy in India’s Goa state in late October. The drill coincided with the official visit of the German Chancellor Olaf Scholz along with a business delegation to Delhi, where he met Prime Minister Narendra Modi, finalizing an MoU for logistics arrangement between the armed forces, co-production and joint research.
INDIA | Indian company Jindal Steel International (JSI) will become the new sole owner of the Czech metallurgical company Vítkovice Steel. JSI belongs to the Jindal Group which also operates in the steel, energy and mining sectors with more than 50, 000 employees worldwide. The acquisition is yet to be assessed by the Czech Antimonopoly Office.
INDIA | MATADOR Group, the largest domestic automotive subcontractor in Slovakia, announced plans to extend its portfolio and global presence outside the EU and to invest in the automotive company in India. Financial reviews for the acquisition are ongoing with the outlook of finalizing the deal and further information by the end of the year.
