EU-China

Published on
03/06/2026 – 17:25 GMT+2

The European Commission confirmed to Euronews on Wednesday that EU trade chief Maroš Šefčovič will meet his Chinese counterpart, trade envoy Li Chenggang, on the sidelines of an OECD ministerial meeting in Paris on Thursday.

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The visit comes as EU-China relations remain strained, with Brussels seeking to crack down on Chinese overcapacity and tackle a record-high €359.9 billion trade deficit with Beijing.

After the EU unveiled the so-called Industrial Accelerator Act and the Cybersecurity Act which could exclude Chinese companies from the EU market, China threatened retaliation, fuelling fears of a trade war between the two trading partners.

Tensions escalated further last week when EU commissioners met to discuss the bloc’s strategy towards the Asian giant.

“The current state of the trade and investment relationship is not sustainable,” the Commission said in a statement after the meeting.

An EU official told Euronews that a majority of the Commissioners had agreed to strengthen the EU’s trade defence tools to help counter China. Proposals will be made to EU leaders during their summit on 18 June.

However, member states remain divided over the EU’s China policy. A non-paper signed by France, Italy, Spain, the Netherlands and Lithuania called for faster use of tariffs and quotas on imports threatening EU industrial sectors, with China the principle target. The idea is to restore a level playing field against Chinese trade practices that many in Europe describe as unfair.

Among those countries taking a different line is Germany, whose policy is to preserve access to the Chinese market for its companies even as it faces a deep trade deficit.

Meanwhile, the Commission said it will continue engaging with China. There have been reports that Commerce Minister Wang Wentao could visit Brussels on 28 and 29 June, but the visit has not yet been publicly confirmed.

Tensions between China and the EU have intensified in recent months, prompting the European Commission to convene most of its commissioners for a strategic rethink during an “orientation debate” on Friday.

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“China is a critical partner, and engagement and dialogue will continue,” the commission said in a readout following the debate. “At the same time the current state of the trade and investment relationship is not sustainable.”

Calling the relationship “not sustainable” may understate the depth of the rupture.

Relations have steadily deteriorated since European Commission President Ursula von der Leyen branded Beijing a “systemic rival” in a landmark 2023 speech. But tensions surged to a new level once EU policymakers finally settled their differences over the EU-US trade deal that had consumed Brussels for months, freeing the bloc to sharpen its focus on China.

Last year, according to the commission, the bloc registered a record-high €359.9 billion trade deficit with Beijing, fuelling growing calls in Brussels to better protect the EU market from cheap Chinese imports that threaten entire sectors — metals, chemicals and the car industry among them.

“We are seeing a panic attack in the last few weeks on China,” an EU official told Euronews, speaking on condition of anonymity to speak candidly. The official added that the China issue had been “overlooked for too long.”

A total of 200,000 European jobs were lost in EU industry — particularly in the energy-intensive and automotive sectors — since 2024, with a further 600,000 job losses projected this decade in carmaking alone.

On Friday, the commission readout specified that its “overarching approach remains de-risking, not decoupling,” signalling that the bloc is still pursuing targeted efforts to reduce its dependence on China rather than sever economic ties altogether. Yet the risk of a full-scale trade war has never felt so real.

Here are five key points on how the situation has escalated to this point — and where it may be headed next :

1. Fines and regulatory pressure

During the previous legislative term, the EU passed legislation that drew Beijing’s anger — notably measures to screen foreign direct investment. And it has stepped up its fight against so-called dumping, whereby public subsidies are used to undercut competitors through exports sold below market prices in China.

The European Commission has grown increasingly assertive in countering China’s subsidy-driven approach, including by imposing duties on imports of battery electric vehicles. Several product-specific investigations are also ongoing.

Earlier this week, the Commission fined Chinese e-commerce giant Temu €200 million for selling unsafe products and opened a full-scale investigation into JD.com’s acquisition of e-commerce retailer MediaMarkt.

EU lawmakers and governments are also discussing the Industrial Accelerator Act, a legislative proposal that would impose strict conditions on investments in batteries, electric vehicles, solar panels and critical raw materials from countries controlling 40% of the global market share in a given sector.

A separate proposal — a revamped Cybersecurity Act — could push out Chinese equipment suppliers such as Huawei and ZTE from critical infrastructure.

2. A more systemic approach

To counter Chinese overcapacities, the EU agreed in April to double tariffs on steel imports that exceed EU quotas. The measure is a so-called “safeguard” — a tool backed by some of the EU’s largest economies, including France, Italy, Spain, the Netherlands and Lithuania, which called for it to be extended to sectors beyond metals.

In a non-paper, those countries argued that safeguards were more “agile” than other EU instruments targeting cheap export products. The paper also calls for economic security to be factored into assessments of the EU’s interests when deciding on trade defence measures.

The European industry is also ramping up pressure to crack down on Chinese cheap imports calling on the Commission to use trade defence measures “more flexibly, faster, and preventively.”

A major wake-up call for EU policymakers has been the recent case of Nexperia, a Dutch-based chipmaker acquired by Chinese giant Wingtech, which was caught in the crossfire of US-China trade tensions, causing significant disruption in the automotive sector.

The Commission is now set to require sectors such as the car industry to diversify chip suppliers in certain cases, taking supply-chain risks into account in procurement decisions.

Despite these various initiatives, EU policymakers have grown wary that the current rules are too slow-moving for a fast-moving adversary. After duties were imposed on electric vehicle batteries, China’s focus simply shifted to hybrid vehicles.

Brussels is now moving towards a more systemic approach, treating trade defence as a toolbox to rebalance relations with China. One potential addition is a so-called overcapacity instrument to cap imports in specific sectors.

3. China’s threats of retaliation

In recent weeks, China has repeatedly threatened retaliation if the EU presses ahead with closing its market to Chinese goods.

Both the “Made in Europe” legislation and the Cybersecurity Act have drawn Beijing’s ire, prompting intensified lobbying of Brussels and EU member states, with warnings that implementation will trigger a response.

The Europeans are walking a tightrope, acutely aware that their decisions could spark a trade war. After the EU imposed tariffs on Chinese electric vehicles in 2024, Beijing imposed tariffs on EU pork, brandy and dairy products.

“International trade is a two-way street. There’s no forced trade. The China-EU trade relations are win-win in nature. China does not aim for trade surplus,” Chinese Foreign Ministry spokesperson Mao Ning said at a press briefing on Thursday.

“The EU needs to put trade ties with China in perspective and honour its commitment to free trade. China will closely follow the EU’s moves and take all measures necessary to safeguard legitimate rights and interests,” Ning added.

Some argue it is already too late for the Europeans, who depend on China for key components of their supply chains — components Beijing can weaponize at will.

In 2025, China blocked exports of rare earths, which are vital for EU green technology and defence, as well as chips essential to the European car industry. Beijing can also leverage operating licences for EU companies and restrict access to its market at any time.

4. European divisions

Europe is far from united on China.

Germany, despite a troubling trade deficit with Beijing, has been slow to shift away from its cooperative approach, which prioritises securing market access for German companies in China.

Berlin did not endorse last weekend’s non-paper backed by other major EU economies. Instead, German Economy Minister Katherina Reiche repeated this week that Germany’s overriding priority is to avoid jeopardising exports to China.

Yet the economic cost of dependence on Beijing might be forcing Berlin to reconsider its stance. The German government is reportedly weighing a tougher line that would mark a significant shift in its China policy.

For years, the German industry had a relationship with the Chinese market that critics described as toxic — one that blocked any meaningful attempt to rebalance the trade deficit out of fear of losing commercial access to the vast Asian market.

Spain has emerged as the other major EU country reluctant to act against China. With relatively cheap energy costs, Spain has become attractive to foreign investors, of which Beijing accounts for a growing share.

Its position caused embarrassment for Madrid this week, after it initially appeared to support the France-led non-paper before retreating and claiming it had merely participated in discussions.

“There has been no specific political support for any ‘non-paper’,” Spanish trade minister Carlos Cuerpo said, adding that the EU should “engage” with Chinese authorities through “dialogue.”

5. What happens now?

Brussels’ reassessment of its China stance has been long in the making, rooted in decades of deepening economic dependence. But the latest acceleration was also prompted by a shift in US posture, most visibly the recent visit to Beijing by President Donald Trump.

The Commission’s orientation debate on Friday was just a first step in what could become a broader repositioning. Where that leads — given internal divisions and the threat of retaliation — remains deeply uncertain.

The conclusions of that exercise are expected to feed into a discussion on economic security at the next European Council meeting on 18-19 June. China has appeared on EU leaders’ agenda several times in recent years, only to be pushed aside by more pressing crises.

While Brussels considers adding new instruments to its policy toolbox, political will remains the key determining factor. Nowhere is that gap more stark than in the EU’s handling of the anti-coercion instrument, also known as the “trade bazooka,” which was designed to push back against economic pressure and unfair trade restrictions.

“The anti-coercive instrument was never used, even though we have been coerced quite a lot,” the EU official said. “We need tools that we are actually willing to use.”

The EU’s new car market maintained steady growth through the first four months of 2026, with nearly 3.8 million vehicles registered, up 4.2% from the same period in 2025. This is according to data published on Wednesday by the European Automobile Manufacturers’ Association (ACEA).

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The figures show a market increasingly dominated by electric and hybrid vehicles, helped by government incentives in major economies and growing competition from Chinese carmakers.

According to ACEA, between January and April 2026, battery-electric cars accounted for 19.7% of the EU market, up from 15.3% a year earlier. Growth was mainly driven by the bloc’s four largest markets, with Italy (+25.5%), Spain (+19.7%), Germany (+6.6%) and France (+2.3%) all recording gains.

In April alone, sales of battery electric vehicles were up by 37.7% in the EU from the same month last year, lifting their market share to 20.6% for the month.

Hybrid-electric vehicles remained the most popular single powertrain choice in April, up 12%, accounting for roughly 36.9% of the month’s sales.

Plug-in hybrids added 16.4%, capturing roughly a 9.8% share in April registrations.

On the other side of the ledger, petrol car registrations fell 16.3% to fewer than 218,500 units, while diesel dropped 17.1% to around 74,000.

Together, petrol and diesel cars accounted for less than 30% of vehicles sold across the EU in April.

European brands performance in 2026

Volkswagen Group retained its position as the bloc’s largest carmaker in the first four months of 2026, accounting for 26.7% of all new registrations, with just over one million units sold, up 2.9% year-on-year.

However, performance varied across the group. Skoda registrations rose 15.5%, and Audi gained 8.6%, while the core Volkswagen brand slipped 3.2%, losing ground across multiple segments.

Stellantis ranked second with a 17.1% market share and over 648,000 units, up a robust 7.8%, driven by a recovery at Fiat of over 32%, and strong gains at Opel and Vauxhall, which together rose 22% in registrations.

Renault Group was the weakest performer in the top three, declining 7.4% to around 384,250 units and accounting for a 10.1% market share, with Dacia registering a particularly sharp fall of more than 15%.

BMW Group and Mercedes-Benz posted gains of 3.9% and 3.8%, respectively, while Toyota and Hyundai Group both recorded modest declines of between 2.5% and 3.1%.

The Chinese surge

The most significant trend in April’s data was the continued rise of Chinese carmakers.

According to ACEA figures, BYD’s EU registrations more than doubled year-on-year in the first four months of 2026, surging 152.9% to more than 71,850 units.

Chery Automobile, through its Omoda, Jaecoo and Jetour brands, grew 267.1% to more than 48,350 units, while Leapmotor, distributing through its joint venture with Stellantis, soared 558.8% to over 28,700 units.

SAIC Motor, owner of the MG brand and the largest Chinese group by EU volume, added a further 10.4% to reach more than 77,000 units.

Combined, Chinese brands accounted for around 6% of EU car registrations between January and April 2026, compared with 3.2% in the same period a year earlier. Across the wider European market, including the UK and EFTA countries, Chinese brands accounted for a combined market share of roughly 7.3% over the same period, up from 3.7% a year earlier.

German Trade Minister Katherina Reiche is travelling to China from Tuesday to Friday as Berlin’s trade deficit with Beijing continues to deepen.

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The trip comes two days after several of the EU’s largest economies – France, Spain, Italy, the Netherlands, as well as Lithuania – issued a non-paper urging the EU to crack down on Chinese overcapacity and unfair trade practices.

Berlin, however, did not endorse their call.

Germany remains the main chokepoint in the EU’s strategy towards China. While Euronews previously reported that the publication late last year of Germany’s trade deficit with Beijing marked a turning point for the EU executive, which is trying to sharpen its trade defence tools, Germany continues to favour cooperation with the Chinese.

In March, German Chancellor Friedrich Merz called for a trade agreement with Beijing. Brussels pushed back against the idea.

“There are a number of concerns and real challenges that the European Union has consistently expressed to China that we need to see them meaningfully address before we can even talk about any future agreements or anything like that,” the Commission’s deputy chief spokesperson, Olof Gill, said at the time.

Even with a record €87 billion trade deficit with China, Berlin hopes Beijing will keep its market open to German industry, despite the obstacles faced by EU businesses in China and the Asian giant’s strategy of reducing its dependence on foreign products.

Access to China’s market

The main objective of Reiche’s visit this week is to discuss potential economic cooperation. According to the German government, the strategy is to explore future opportunities for collaboration while maintaining dialogue with the Chinese leadership.

Despite a steadily growing trade deficit, China remained Germany’s most important trading partner in 2025. According to the Federal Statistical Office, bilateral trade volume reached €250 billion. Around 5,200 German companies operate in China, making the country one of the most important foreign markets for Germany’s automotive, mechanical engineering and electrical industries.

During the trip, Reiche is expected to hold political talks, attend a business forum and visit local companies. She will be accompanied by a business delegation representing around 40 companies. Discussions are also set to focus on the development of energy technologies.

“We hope the visit will help to transfer the insights gained on the ground into the political discussion in Berlin and to further develop bilateral exchange,” said Oliver Oehms, Executive Director of the German Chamber of Commerce in China.

In a survey published in May by the chamber, 51% of German companies operating in China supported policies favouring partnerships with Chinese companies, while 42% backed the “strategic” use of knowledge gained through such partnerships.

But these sectors are also increasingly under pressure, as Chinese competitors benefit from extensive state subsidies.

According to a report published in May by the EU think tank Centre for European Reform, the growing concentration of global car, machinery and chemicals production in China could weaken innovation in traditional manufacturing hubs and increase Beijing’s leverage over Berlin through the threat of supply disruptions, similar to its blockade of rare earth exports in 2025.

The report added that demand generated by Germany’s fiscal stimulus after easing its debt brake could end up boosting Chinese imports rather than supporting Berlin’s domestic industry.

German exports to China fell by 9.7% year-on-year, while imports of Chinese goods such as electronics, electric vehicles and components rose significantly by 8.8%.

“China has already eaten much of German industry’s lunch and is preparing to start on dinner,” the report said.

Published on
22/05/2026 – 18:31 GMT+2

EU Industry Commissioner Stéphane Séjourné called for EU businesses to diversify their suppliers on Friday as trade tensions with China ramp up.

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The comments come as Beijing has made repeated threats towards the EU in recent weeks, while Brussels seeks to strengthen its legislation against its Asian rival.

Last year, China restricted exports of rare earths and chips, strategic for the EU’s green technologies, defence and automotive industries.

“Do not make 100% of your supplies in one country,” Séjourné told EU businesses after a meeting with the EU’s 27 trade ministers in Brussels. He added: “The global geopolitical situation shows that your ability to provide yourself abroad must also depend on other types of countries and also on European production.”

The European Commission has so far issued guidance to EU companies and Séjourné signalled that if they did not move, the EU executive would “perhaps have to move to the next step.”

Measures force car producers to diversify

Internally, the Commission is already working on a proposal to force car producers to source chips from multiple suppliers, Euronews has revealed.

Last year, a spat between the Dutch government and the Chinese chip company Nexperia, based in the Netherlands, caused shortages of chips for EU industries after Beijing blocked exports in retaliation.

EU Trade Chief Maroš Šefčovič told Euronews at the time that China was “weaponising” critical supplies for EU industry.

Brussels and Beijing have been at loggerheads since the EU presented several proposals restricting China’s access to the EU single market.

The so-called “Industrial Accelerator Act” aims to favour EU companies in public procurement and impose strict conditions on Chinese investments in the bloc. Meanwhile, a Cybersecurity Act could exclude Chinese telecoms companies from the EU market.

Beijing has directly threatened the EU with retaliation if it moves forward with those proposals. China repeated the threats after media reports about potential EU measures against cheap Chinese imports flooding the EU market.

An orientation debate is set to take place in Brussels between EU commissioners on 29 May to decide on the EU’s strategy as its trade deficit with China becomes more critical month after month.

As Chinese-made products are flooding the EU market and threatening thousands of jobs, the European Commission is stepping up its work to protect the bloc’s production from the risks of China’s excess production.

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The move comes as data from Chinese customs showed that, in the first four months of 2026, Beijing accumulated a surplus of $113 billion with the EU-27, up from $91 billion over the same period in 2025. The surplus widened by $22 billion over 12 month, while the EU’s trade deficit with China had already reached €359.9 billion in 2025.

Pressure is also mounting on Brussels as Beijing has repeatedly threatened retaliation in recent weeks over several EU laws limiting access to the single market for Chinese companies.

On Friday, China also banned these companies from engaging with the Commission over EU foreign subsidy investigations.

To address the China issue and try to restore a level playing field, EU Commissioners are set to debate the matter on 29 May. What options does Europe have on the table?

1. Cutting dependence on Chinese components

The Financial Times reported on Monday that a plan to force EU companies to buy critical components from at least three different suppliers was in the pipeline at the European Commission.

The idea would be to set thresholds of around 30% to 40% for what can be bought from a single supplier, with the rest having to be sourced from at least three different suppliers, not all from the same country.

The proposal comes after China last year restricted exports of rare earths and chips, which are critical for key EU industries such as green tech, cars and defence.

2. Targeting strategic sectors with tariffs

In its economic security strategy presented last December, the European Commission also said it would present new tools by September 2026 to strengthen the protection of EU industry from unfair trade policies and overcapacities.

“We will fight tooth and nail for every European job, for every European company, for every open sector, if we see they are treated unfairly,” Maroš Šefčovič told Euronews.

A decision to impose new quotas and double tariffs on global steel imports, dominated by Chinese overcapacities, was already agreed by EU countries and the European Parliament in April.

Now the chemical industry is in the spotlight. Chinese chemical imports have surged 81% over five years. But the EU chemical sector also relies on exports abroad, including to China, the industry’s fourth export market, which makes any measure targeting China complicated.

“As an export-oriented industry, the European chemical industry generates over 30% of its sales abroad. That creates a risk of retaliation from third countries,” Philipp Sauer, trade expert at Cefic, the lobby group of the European chemical industry, told Euronews.

3. Hitting imports with anti-dumping or anti-subsidy duties

The Commission can also impose duties on Chinese companies when import prices fall below those at which they sell their products on their domestic market. It can also investigate companies for receiving unfair subsidies.

However, investigations can take up to 18 months, and cases are piling up at the Commission’s DG Trade, which has only around 140 officials to handle them.

Sauer said that between one third and half of all ongoing investigations relate to the chemical sector.

4. Using the Anti-Coercion Instrument

The Anti-Coercion Instrument is a last-resort tool — the so-called trade bazooka — which can be used in cases of economic pressure from a third country and would allow the EU to hit China with strong measures such as restricting access to licences or public procurement in the EU.

But its use would require the backing of a qualified majority of member states, which is not guaranteed.

Germany opposed tariffs adopted by the EU in 2024 against Chinese electric vehicles. Spanish Prime Minister Pedro Sánchez, who has visited China four times in three years, also supports closer ties with Beijing, seeking to secure major Chinese investment.

5. Unifying member states

At the same time, Brussels faces the risk that its decoupling strategy might face significant resistance from national governments. EU member states remain divided over how to approach China, which could in turn allow Beijing to play capitals against each other.

Such differences are already emerging in the information and communications technology (ICT) sector, where the EU has proposed a new mechanism requiring the phase-out of so-called high-risk suppliers, such as Huawei and ZTE, in strategic industries, starting with telecommunications.

The proposal, included in the revamp of the EU Cybersecurity Act, is sparking controversy among several European governments, most notably Spain and Germany, which have long worked with Chinese equipment now deeply embedded in their digital infrastructure.

This de-risking strategy has also raised financial concerns, since Chinese suppliers tend to be much cheaper than European alternatives such as Ericsson and Nokia, partly because they are publicly subsidised by Beijing.

European telecom operators have asked the EU for financial compensation to replace their Chinese equipment, following the example of the US “rip and replace” programme, but neither the EU nor national governments seem keen to put the money on the table.

In other words, the EU’s full decoupling from China might have high political and economic costs.

Whether European countries are willing to bear it remains to be seen.

In an interview with Euronews, EU Trade Commissioner Maroš Šefčovič issued a firm warning that the European Union will not hesitate to defend its industries after Beijing signaled possible retaliation over new EU plans to bolster its industrial base.

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China this week up the pressure on Brussels, threatening countermeasures unless the EU softens core elements of its “Made in Europe” proposal—designed to tighten market access for foreign companies—and its Cybersecurity Act, which could ultimately restrict Chinese telecom firms’ presence across the bloc.

Asked about China’s reaction to what the EU describes as much-needed measures to reinforce its sovereignty and restore a level playing field, Šefčovič told Euronews the EU will “always” defend the interests of its companies.

“We will fight tooth and nail for every European job, for every European company, for every open sector, if we see they are treated unfairly,” said Šefčovič in comments to Euronews in an exclusive interview Friday.

Ballooning trade deficit in detriment to EU

Relations between Brussels and Beijing have deteriorated sharply over the past year, with China tightening export controls on rare earths vital to Europe’s clean-tech and defence industries, as well as restricting chips essential to the automotive sector, intensifying pressure on already fragile supply chains across the bloc.

In response, the EU has pushed for legislative proposals in the domain of cybersecurity and single market rules for companies, prompting a sharp reaction from China which has accused the EU of unfair practices. Earlier this week, Beijing said the EU should not underestimate China’s “firm resolve” to safeguard its interests.

Šefčovič rejected the suggestion that recent developments signal a looming trade war but stressed that the EU does not operate under pressure and expects to be treated with respect. “We never threaten our partners, and we certainly don’t do it through the media,” he said. “What we need is strategic patience and a great deal of courage.”

He said a “war” is often easy to start, but difficult to exit. A Chinese official told Euronews Beijing does not wish for a trade spat to escalate, but said China is serious about what it considers discriminatory practices. The EU disputes discrimination.

The EU’s trade chief pointed to a ballooning trade deficit between the two sides as a cause for concern. The bloc’s trade gap with China surged to €359.3 billion in 2025, a level Šefčovič called “simply unsustainable” that does not show signs of improvement.

He also said policymakers, the European parliament and economic actors in the EU have delivered “a very strong economic and political reaction” to tackle the trade deficit.

So far, Brussels has failed to secure meaningful commitments from Beijing to rebalance trade relations. At the same time, EU officials are growing increasingly concerned that Chinese exports—shut out of the US market by higher tariffs—are being redirected towards Europe. Brussels also points to China’s overcapacity as a source of concern.

The EU is now pressing Beijing to enter serious negotiations and deliver concrete results.

“I invited the Chinese foreign minister to visit Brussels because I think we need a very thorough assessment of the current situation,” Šefčovič told Euronews. “What I want is constructive engagement.”

Faced with a surge in low-cost Chinese imports, the EU is relying on trade defence instruments to counter what it sees as dumped and heavily subsidised goods, while also monitoring efforts by Chinese firms to bypass restrictions by shifting production outside China. Šefčovič made clear the EU will not be pushed into retreat from those issues.

“There are very strong industrial policies in China. You have the same in the US, in Canada, in Japan and in Korea. So, nobody should be surprised if the European Union responds in kind—especially when it comes to public money and public funds.”

Published on 29/04/2026 – 19:52 GMT+2•Updated
19:57

China has called on EU member states to revise the bloc’s proposed “Made in Europe” legislation, according to Suo Peng, trade and economy minister at China’s mission in Brussels.

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The European Union is currently debating the draft, which was unveiled by the European Commission in March and aims to impose stricter conditions on foreign companies seeking access to EU public procurement and investment opportunities.

The proposal — widely interpreted as targeting Chinese firms — has already drawn a warning from Beijing. Earlier this week, China’s commerce ministry said it would consider retaliatory measures if the EU proceeds without significant changes.

“Chinese embassies in EU member states have conveyed China’s comments and suggestions to the governments of their hosting countries,” Peng told journalists in Brussels.

He added that if the EU “insists on this punishment and treats China’s enterprises in a discriminatory manner,” Beijing would be forced to respond with countermeasures.

Public procurement rules and investment limits

The so-called Industrial Accelerator Act would, if adopted by EU governments and the European Parliament, prioritise European-made products in public procurement in sectors considered strategic, including automotive, green technologies, and energy-intensive industries such as aluminium and steel.

It would also place conditions on foreign direct investment exceeding €100 million in areas such as batteries, electric vehicles, solar panels and critical raw materials.

Companies from countries with more than 40% global market share in a given sector could be required to form joint ventures with European partners and transfer technology. At least half of jobs in such projects would also need to go to EU workers.

China has criticised the measures as discriminatory, with Peng accusing the EU of double standards on technology transfer rules. He pointed to a 2018 joint statement with the United States and Japan opposing forced technology transfers.

Divisions within the EU

EU member states remain split over the proposal. France is pushing for stricter local content requirements, while Germany and others are calling for a broader approach that includes cooperation with like-minded partners.

Some countries have also warned that the rules could increase costs and limit access to innovation.

The proposal includes a reciprocity principle in public procurement, meaning the EU would only open its market to countries that grant similar access to European firms.

China, which does not currently have such an agreement with the EU, says it is open to a bilateral deal on government procurement. Peng urged Brussels to respond “as soon as possible”.

Otherwise, he warned, the plan “will seriously damage the actual interests of Chinese and European companies.”

On China, the mood at the European Commission has shifted in recent months.

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China hawks are gaining ground inside both the Commission’s powerful Directorate-General for Trade and in the cabinet of President Ursula von der Leyen, Euronews has learned, with drastic new measures being considered to counter what is seen as unfair competition.

The 27 EU commissioners are set to debate on their China strategy on 29 May, with one official saying, “It will be about acknowledging there is a problem and that something needs to be done.”

Tensions flared Monday after China’s Ministry of Commerce threatened retaliation against the EU over its Made in Europe legislation, which sets strict conditions on foreign direct investment.

An EU official told Euronews the Chinese were “playing games,” adding that the Commission’s priority remains engagement with Beijing through multiple channels set up in recent months.

However, Commission services are already working on new measures to address China’s economic threats, sources have confirmed. “We don’t see any move from the Chinese despite all the issues we have flagged with them, so there’s a reflection on whether we should do more,” one said.

Another source said the release of Germany’s trade deficit figures before Christmas marked a turning point for the Commission.

Data published last autumn by Germany Trade & Invest (GTAI) showed a record €87 billion German trade deficit with China — a wake-up call in Berlin, long focused on securing market access in China ahead of protecting domestic manufacturing.

China has since surged up the agenda for German industry, for the Bundestag — which has set up a dedicated committee — and for the Commission, whose German president has Berlin’s ear.

The EU has long grappled with cheap Chinese imports threatening its industry. Pressure intensified last year after the US slapped steep tariffs on Chinese goods, effectively shutting its market and pushing Beijing to reroute overcapacity in sectors like steel and chemicals toward Europe.

A recent report by the French High Commission for Strategy and Planning, a French government advisory body, warned that “the production cost gaps, as assessed by industry players [across Europe], have now reached levels incompatible with sustainable competition, averaging between 30% and 40%, and exceeding 60% in certain segments (industrial robotics, mechanical components).”

Under these conditions, how can the EU defend its market?

The bloc’s leverage is mainly limited to its 450 million-strong consumer base. Still, one source said it is “increasingly becoming mainstream” inside the Commission to warn Beijing that the EU market could close without rebalancing.

But the trade-offs are stark.

Chinese electric vehicles — hit with EU tariffs in October 2024 — highlight the dilemma. China depended equally on the US and EU markets for almost all its exports before Donald Trump’s return to the White House in 2025. “It cannot easily diversify its EVs as it will not sell in Africa, nor in southeast Asia, where there’s no infrastructure,” another source said.

At the same time, Europe remains reliant on China imports in many of the same sectors where China depends on Europe. “Are we to close our market to lithium batteries from China? We cannot do this overnight,” the same source said. The same applies to solar panels, laptops and medical devices.

Commission explores anti-coercion tool

The EU has trade defence tools — including anti-dumping and anti-subsidy duties — but they can take at least 18 months to deploy after a complaint is filed. Two sources said the Commission is working on new instruments, but by the time they bite, the damage may already be done.

A fourth source described an overcapacity instrument as still “premature.”

However, Commission services are also mulling the Anti-Coercion Instrument (ACI), which allows the EU to deploy a wide range of measures — from tariffs to restrictions on public procurement or intellectual property — in response to economic pressure from third countries.

The tool, sometimes described as a “trade bazooka”, has never been used since its creation in 2023, but resurfaced after China weaponised rare earth exports in October 2025 during its trade standoff with the US by imposing strict export controls.

Exports resumed after Washington and Beijing agreed on a one-year truce, which also covers Europe. But that deal expires in October 2026, leaving uncertainty hanging over the EU.

Brussels wants the anti-coercion tool ready if needed.

Tensions could rise further after Beijing’s threats over the Industrial Accelerator Act — the Made in Europe legislation now debated by member states and MEPs — or over pressure linked to the Cybersecurity Act, which could phase out Chinese telecom operators from the EU market.

Securing member states’ backing

However, a qualified majority of EU countries is needed to activate the ACI, and member states remain split.

“It requires a political support higher than for the traditional anti-dumping or anti-subsidies duties which can only be rejected by a reversed majority of EU countries,” a source said.

Despite the wake-up call, German Chancellor Friedrich Merz struck a softer tone in March, floating a long-term trade deal with Beijing.

But in Brussels, that idea is off the table.

“There are a number of concerns and real challenges that the European Union has consistently expressed to China that we need to see them meaningfully address before we can even talk about any future agreements or anything like that,” the Commission’s deputy chief spokesperson, Olof Gill, said.

Spanish Prime Minister Pedro Sánchez — who has visited China four times in three years and secured major Chinese investment — backs closer ties with Beijing.

Meanwhile, Belgian Prime Minister Bart De Wever urged a tougher line in an 18 March letter to von der Leyen.

“We have arrived at a point of no return in which we need to make difficult choices in the short term towards China to protect our industries, economies and the well-being of our citizens in the long term,” he wrote.

France, long a proponent of a hard line on China, shares that view.

Published on 18/04/2026 – 22:58 GMT+2•Updated
23:06

A coalition of EU-based chemical producers of titanium dioxide – a strategic chemical used in green energy and aerospace – has lodged a complaint with the Commission alleging unfair foreign subsidies against leading Chinese producer LB Group, which is seeking to acquire a UK plant of British competitor Venator, Euronews has learned.

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The move follows the European Commission’s decision in January 2025 to impose anti-dumping duties on LB Group, a trade defence measure targeting low-priced imports into the EU.

Acquiring a production plant in the UK would allow the Chinese group to export its products to the European market duty-free under the EU-UK trade agreement, circumventing EU anti-dumping tariffs.

The EU chemical sector is under pressure from growing competition from Chinese rivals, which are flooding the market with overcapacity.

The alliance behind the complaint against LB Group includes several companies producing in the EU — US-based Tronox and Kronos, Czech Precheza and Slovenian Cinkarna — collectively accounting for about 90% of EU titanium dioxide production.

Enforcing the Foreign Subsidies Regulation outside the EU

Sources said the complaint was filed in December 2025, urging the European Commission to investigate the Chinese company over alleged unfair foreign subsidies used to finance the acquisition of Venator’s plant.

The EU’s Foreign Subsidies Regulation, adopted in 2022, allows the Commission to investigate non-EU companies to assess whether they benefit from distortive foreign subsidies to make acquisitions in the EU or take part in public procurement.

The tool was initially designed with China in mind, reflecting concerns over excessive state subsidies support for Chinese companies acquiring strategic EU assets or infrastructure. However, the regulation has not yet been applied outside the EU.

The plant targeted by LB Group is located in Greatham in northeast England, which left the EU in 2020 after Brexit. The UK’s Competition and Markets Authority is currently reviewing the deal and is expected to issue a decision in May.

If the European Commission opens an investigation under the Foreign Subsidies Regulation, it could set a precedent and send a strong signal globally.

The move would come as the EU chemical industry loses market share in Europe.

According to Cefic, which represents the sector in Brussels, the bloc has lost around 9% of its production capacity since 2022, resulting in the loss of 20,000 direct jobs.

Published on
15/04/2026 – 11:25 GMT+2

The European Commission on Wednesday imposed anti-dumping duties on glass fibre —a key input for the EU’s renewable industry— produced by Chinese companies operating in Egypt, Bahrain and Thailand.

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The move confirms the EU’s push to curb Chinese imports entering the bloc via Belt and Road routes to sidestep tariffs on products officially labelled “made in China.”

Brussels seeks to shield its market from a surge of low-cost imports from the Asian giant, targeting goods it considers heavily subsidized or sold in the EU below production cost in China.

The tariffs on glass fibre from the three countries will range from 11% to 25.4% of the product’s value.

“The investigation confirms the existence of unfair practice, which is an important signal,” Ludovic Piraux, President of Glass Fibre Europe, said.

But he added that the measures adopted “remain insufficient to fully address the predatory strategies pursued through these investments in third countries.”

Job losses loom

China has invested $1 trillion through the Belt and Road initiative – a large-scale infrastructure programme which replaced the former silk road initiative and is aimed at strengthening connectivity, trade and communication across Eurasia, Latin America and Africa. The programme spans more than 150 countries, supporting infrastructure, transport, raw materials extraction and the relocation of industries and state-owned enterprises abroad.

As early as 2010, following an industry complaint, the Commission imposed anti-dumping duties on Chinese glass fibre imports. In the years that followed, Chinese producers established factories in Bahrain and Egypt, from which exports to the EU resumed.

By 2024, glass fibre imports from those countries, along with Thailand, accounted for 24% of the EU market. Egyptian imports alone reached 18%, with Glass Fibre Europe warning the situation could worsen.

This is not the first time the Commission has targeted Chinese products made in third countries under Belt and Road arrangements. It has previously imposed measures on aluminium foil from Thailand and glass fibre produced in Türkiye.

European glass fibre manufacturers have been pushing for action for more than a decade, alongside unions seeking to protect jobs in the sector.

The complaint which lead to Wednesday’s anti-dumping duties was first reported by Euronews in January 2025.

The industry directly employs more than 4,500 workers in the EU and says it supports hundreds of thousands of indirect jobs along the value chain.

Judith Kirton-Darling, General secretary of industriAll Europe, warned that “in the longer term”, the situation could worsen if the EU does not take “a stronger” stance on Chinese dumping.

“It is more than likely that we will face plant closures in Europe which will fundamentally undermine our industry,” she said.