EU Prepares Robust Defense Against China Trade Imbalances
The European Union (EU) has declared it must take tougher action to rebalance trade relations with China. The move follows intensive talks among bloc executives to protect critical industries from an influx of Chinese competitors.
After tensions with the United States eased following a 2025 trade agreement, the EU has shifted its full focus to China. Experts and European governments are warning of a ‘China Shock 2.0’—a surge of cheap Chinese goods threatening global manufacturing amid widening trade deficits.
The EU’s goods trade deficit with China reached a worrying €360 billion (approximately Rp6.2 trillion) last year. EU Industry Chief Stephane Sejourne stated Chinese industrial dominance is not accidental, citing decades of state subsidies and unreciprocal market access. He added that around 29 million European jobs are at high risk in the coming months due to this imbalance.
European Commission President Ursula von der Leyen continues to push a ‘de-risk, not decouple’ approach, aiming to balance concerns over excessive reliance on China while preserving crucial economic ties.
Metal, clean tech, and fertilizer industry groups are pushing for faster and more effective trade defenses. The EU is considering measures similar to the US Section 301, which allows specific tariffs on sectors like chemicals, metals, and green tech.
Despite growing calls for tough action, the EU faces internal challenges. Four major economies—France, Italy, the Netherlands, and another—have circulated documents demanding harsher steps against unfair trade practices. However, Germany, Europe’s largest economy, opposes aggressive moves against Beijing, fearing retaliatory measures that could harm its automotive and machinery exports to China. Economic analyst Sander Tordoir of the Centre for European Reform notes a shift in Berlin’s stance towards a tougher position.
Beyond tariffs, the EU plans to introduce new rules next week to bolster local chip manufacturing and diversify trade partners, particularly for rare earth minerals, to reduce vulnerability to Beijing’s export controls.
In response, Chinese Foreign Ministry spokesperson Mao Ning stated Beijing is closely monitoring developments and will take necessary steps to safeguard its legitimate rights and interests.