Decoupling from China not an option for EU firms - Dombrovskis

European Trade Commissioner Valdis Dombrovskis presents a review of trade and sustainable development, in Brussels, Belgium June 22, 2022. REUTERS/Yves Herman

BERLIN, Oct 11 (Reuters) - Decoupling from China is not an option for companies in the European Union, EU trade commissioner Valdis Dombrovskis told an engineering conference in Berlin on Tuesday, as the Ukraine war redefines how the bloc sees its important trade partners.

"The EU should continue engaging with China with pragmatism and without naivety. Our trading relationship needs more balance and reciprocity," he said, calling for more focus on better risk management and diversification instead of pulling away.

Besides China, the EU's relations with its other important trade partner, the United States, have also changed, he said.

"The transatlantic relationship has been reinvigorated," he said, but there are "deep concerns" about the U.S. Inflation Reduction Act and the advantages it affords to U.S. companies.

Dombrovskis argued that the green subsidies provided for in the act discriminate against the EU's automotive, renewables, battery and energy-intensive industries.

The $430 billion climate, health and tax bill was signed into law in August and has also prompted South Korea to raise concerns about tax credits for electric vehicle purchases.

"I will be raising these issues with my American counterparts when I travel to Washington tomorrow," he said.

German Chancellor Olaf Scholz, speaking at the same conference, said Germany will discuss the act with Washington.

Writing by Miranda Murray Editing by Madeline Chambers, Kirsten Donovan

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