Drunk on fake liquor? France wants China to sign a Plaza Accord!!
France is reportedly trying to get China to sign a Plaza Accord, which is hard to believe considering how much fake liquor they must have consumed to attract attention. Recently, France's official consulting agency submitted a policy proposal to the French government, claiming that the European industry is facing a survival crisis. China accounts for one third of the global manufacturing share, while Europe only accounts for fifteen percent. Fifty-five percent of the manufacturing output in the EU market is facing competition from China.
So they proposed two plans. Plan A is to push for a comprehensive thirty percent tariff on China, and Plan B is to promote a depreciation of the euro against the yuan by twenty to thirty percent, which is what is known as the Plaza Accord. Why is it always France jumping up and down about this?
Because France is currently facing a strong impact from China in the global industrial ecosystem. In Europe, Germany's high-end automobiles, precision machine tools, and chemical industries have a protective moat. Although they also face competition from China, they still have some meat on their plates. Italy, Spain, and China have a strong industrial complementarity, meaning they are already lying flat without direct competition, while Eastern Europe is quietly profiting from China's production capacity, leaving France as the only major country in Europe struggling.
With no meat left for them, their own industry is suffering, and frankly, they can't rise high or sink low, so they are anxious. But their anxiety is futile; at most, they create a loud noise to disgust others and embarrass themselves. Firstly, France does not have the capability to push for comprehensive tariffs on China, as this possibility has already been locked down by the EU's trade system.
The EU's common commercial policy has stripped member states of their trade policy-making authority. Tariffs fall under trade policy, so the decision-making power for tariffs lies in Brussels, not Paris. Therefore, even if France jumps up and down, it cannot impose even one euro in additional tariffs on Chinese goods.
A typical example is in October 2024, when France pushed for a vote on EU electric vehicle tariffs, with ten votes in favor, five votes against, and twelve abstentions. The bill was barely passed in the end. However, it should be noted that our country openly opposed it, and twelve countries turned silent, which created a situation where France was left in the hot seat.
As for our countermeasures, they were precisely targeted, and the tariffs that France meticulously pushed for have now been canceled. So can we see if France has the ability to push for the so-called Plaza Accord? Abstract!!
When the five Western countries signed the Plaza Accord, the Cold War confrontation was fierce, and both the US and Soviet economies were somewhat shaky. Under the influence of Reaganomics, the US trade deficit hit a record high, so to save the Western leader from being pushed over by the Soviet Union, the UK, France, Germany, and Japan reluctantly agreed to appreciate their currencies.
Now, France thinks it can make others cooperate with it to depreciate the euro? Perhaps even the US would not agree, and then label it as a currency manipulator. Can France even decide the euro's exchange rate? Has it consulted the European economic locomotive, Germany? Is the European Central Bank theirs to control?
France's current status does not seem to have reached the point where it can decide the euro's exchange rate. Therefore, the ideas put forth by these advisers are fundamentally bad ideas that are not only impractical but also merely provide more ridicule.
What can truly save the French economy is not imposing tariffs on China, but rather honestly controlling fiscal spending, quickly upgrading industries, and enhancing its own competitiveness, rather than just making a scene here, which is rather unambitious.