EU Policy

As a wave of cheap Chinese imports has flooded the EU in recent years, Brussels is now facing a new challenge: new import routes passing through Morocco and Turkey, the EU’s neighbouring countries, where Beijing can leverage tariff-free trade agreements with the bloc.

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By investing heavily in those countries, China is seeking to circumvent the EU’s trade barriers, including the extra duties imposed by the EU on products such as electric vehicles, and channel its industrial overcapacity into the European market.

European policymakers are now bracing for a surge in low-cost Chinese goods entering duty-free through these gateway countries, thanks to an association agreement that liberalises trade with Morocco and a customs union linking Turkey to the EU.

The European Commission launched negotiations with Beijing in June in a bid to rebalance a trade relationship that has left the EU with a €1 billion deficit. However, it is not guaranteed to reach concrete results by October — the deadline set by Trade Commissioner Maroš Šefčovič.

Brussels has already made clear it is prepared to deploy new unilateral trade defence measures. But Beijing is becoming increasingly adept at getting around the EU’s traditional trade tools, particularly trade defence tariffs.

Its circumvention strategy is now to go through Morocco and Turkey, which are becoming the new front line in the EU’s trade battle with China.

Billions in investments

Over the last four years, these investments have reached a record $6 billion in Morocco and $2 billion in Turkey, according to Rhodium Group, an independent research provider.

Cairo is also attracting Chinese money, with $6 billion invested in 2025 alone. But Chinese products made in Egypt are mainly exported to the US and Gulf countries.

In Morocco, Beijing has been investing in an entire electric vehicles (EV) manufacturing ecosystem. “There is a genuine long-term trend that began after COVID-19. We are seeing Chinese companies setting up operations in the country to manufacture high-value-added goods,” Armand Meyer, an expert at Rhodium Group, told Euronews.

Chinese battery producer Gotion is settling in the country, along with BTR, Tinci and Huayou, which produce battery materials, APG, an automotive brake manufacturer, and Sentury Tire, a tyre maker. All will soon have factories in Morocco.

The EU, which hit Chinese EVs with anti-subsidy duties in 2024, is concerned about China’s move into neighbouring countries.

In Turkey, part of the investment targets the local market, while Chinese export plans also threaten European producers. China’s EV giant BYD was granted preferential access to the Turkish market to build a factory, although the project has been suspended for now.

“The idea was to build a mega-factory in exchange for an exemption from Turkish import duties, as Turkey imposes tariffs on Chinese electric vehicles,” Meyer said. Chinese home appliance maker Haier is also investing in the country, as is Astronergy, which manufactures solar panels.

China’s manufacturing push in those countries spans multiple sectors, exploiting trade agreements with the EU that cover a wide range of products.

“The free trade agreements with Morocco and Turkey cover almost all goods. So it’s complicated to counter the Chinese export strategy,” Thomas Grjebine, an economist at the French Centre for Research and Expertise on the World Economy, told Euronews.

Grjebine added that China has understood these countries can serve as “a staging ground”, with investments rising year after year.

“Investments in these gateway countries account for about a quarter of China’s total investment in Europe and the Maghreb,” he said.

Reducing Morocco and Turkey’s access to the EU market

However, in March, the Commission proposed a landmark bill called the Industrial Accelerator Act (IAA) which aims to protect the EU market from foreign competitors — provoking anger from China.

The IAA creates a European preference for access to public procurement and EU public funding schemes, ruling out non-EU countries under certain conditions. China was targeted in particular, leading to threats of retaliation from Beijing.

All foreign countries are now lobbying EU lawmakers, who are discussing the bill, to be considered trusted partners, allowing their products to qualify as “Made in Europe”.

Industries with parts of their value chains outside the EU are also urging MEPs to include those countries. Euronews has learnt that ACEA, for instance, which represents European carmakers in Brussels, has been lobbying EU lawmakers to include Morocco, where many European manufacturers have production plants.

Paradoxically, if Morocco and Turkey — where European carmakers are also established — were considered trusted partners whose products could be labelled “Made in Europe”, it would also serve Beijing’s interests — despite fierce competition with the EU in the automotive sector — as China is building factories there.

“The Chinese know full well that a number of companies have located part of their value chain in those countries and are lobbying hard to ensure that Morocco and Turkey are not excluded from what is considered ‘Made in Europe’,” French socialist MEP Pierre Jouvet told Euronews.

“This is part of Beijing’s investment and tariff circumvention strategy,” he said.

The MEP is campaigning to exclude Morocco and Turkey from the scope of the IAA unless both countries open their public procurement markets to EU companies.

That position is backed by French liberal MEP Christophe Grudler and German Green MEP Anna Cavazzini, who, along with Jouvet, are expected to present a report on the issue to fellow MEPs in September.

EU trade defence instruments lack effectiveness

Without such a bill, the EU’s trade defence instruments remain modest compared with the scale of the coming wave of cheap Chinese products manufactured in those neighbouring countries.

The EU can only tackle Chinese dumping — where a product is sold below its normal value — on a product-by-product basis, as well as tariff circumvention when parts of the goods come from China and have only been assembled in Morocco or Turkey. The Commission usually assesses the value added generated in those countries before deciding whether to sanction Chinese companies with duties.

“For years, it was mostly a matter of transhipment through these countries, with Chinese exporters simply changing the certificate of origin, but defending the EU market has now become far more challenging,” Laurent Ruessmann, partner at law firm RB Legal, told Euronews.

Ruessmann has represented European glass fibre producers — whose products are used as reinforcement materials — in their fight against cheap Chinese imports. Eventually, glass fibre from China and from Chinese companies located in Egypt was hit with EU anti-dumping and anti-subsidy duties in 2020.

But the Commission then had to open new cases involving glass fibre fabrics — used in wind turbine blades — imported from Morocco and Turkey. In 2022, it found that they were made using Chinese glass fibre already subject to EU anti-dumping duties imposed in 2020, a textbook case of tariff circumvention.

More recently, in 2025, the Commission also slapped countervailing duties on aluminium road wheels made in Morocco after concluding China had unfairly subsidised them.

According to the Organisation for Economic Co-operation and Development (OECD), Chinese companies receive up to eight times more subsidies than Western firms.

With recent investments in Morocco and Turkey, the EU executive is facing a new challenge: Chinese companies are setting up factories abroad, generating more added value in those countries than in China.

“In those cases, the Commission can no longer rely on anti-circumvention rules and has to launch a fresh investigation. The challenge is that it is much more difficult to prove dumping or unfair subsidies, making it far harder to impose duties high enough to protect the European market,” Victor Crochet of law firm Nishimura & Asahi told Euronews.

Looking at recent judgments by the Court of Justice of the European Union, however, the lawyer believes EU judges will progressively allow the Commission to be “more aggressive” towards Chinese operations located in the EU’s neighbouring countries.

“The Commission will have to come up with new instruments. It will try to push the boundaries of the concept of circumvention to keep pace with the times, even when the raw materials no longer come from China,” Crochet said.

Published on
30/07/2026 – 12:57 GMT+2

The European Commission is considering opening an investigation into imports of certain construction materials from several Balkan countries over suspicions that they were made using low-cost Chinese glass fibre already subject to EU anti-dumping duties, according to people familiar with the matter.

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The probe will focus on so-called open mesh fabrics, including thermal insulation systems.

The case comes as the European Commission continues to step up pressure on low-cost Chinese imports, which are contributing to the EU’s record-high €1 billion-a-day trade deficit with China. The commission launched negotiations with Beijing in June in a bid to rebalance trade ties, with hopes of securing tangible results by October.

EU Trade Commissioner Maroš Šefčovič expected to travel to China in October.

At the same time, the Commission has warned that it would deploy its trade defence instruments before the deadline to counter low-cost Chinese imports, arguing that China uses unfair practices to gain access to the EU market – including strategies to circumvent EU tariffs.

Open mesh fabrics are often manufactured with Chinese glass fibre, which the Commission has accused Chinese producers of selling at unfairly low prices on the EU market, causing injury to European manufacturers. The EU has targeted glass fibre with additional duties several times in recent years, including imports from Egypt that are produced by Chinese companies.

But Chinese producers are suspected of circumventing those anti-dumping and anti-subsidy duties by relying on local manufacturers in several Balkan countries to assemble open mesh fabrics using low-cost Chinese glass fibre.

The overcapacity problem

The EU produces around 1 million tonnes of melted glass annually from installations operating in eight countries, among them Germany, France and Italy.

But according to Glass Fibre Europe, which represents the glass fibre industry in Brussels, Chinese glass fibre overcapacity exceeds 100 percent of total EU market demand, raising the risk of further harm to European producers unless the EU strengthens its trade defence measures.

Over the past year, the number of cases involving alleged Chinese unfair trade practices across several industrial sectors has increased, and the Commission has been criticised for the length of its investigations.

At a summit in mid-June, EU leaders gave the Commission a mandate to review and update its trade defence instruments.

But the EU’s current trade regulation toolbox remains limited, with Commission only able to address unfair trade practices on a product-by-product basis. Additional safeguard measures – including tariffs and quotas – are also under consideration, Euronews has learned, to protect the European chemicals sector from intense Chinese competition.

The Commission was contacted for comment but did not reply.

Published on
24/07/2026 – 15:03 GMT+2

The European Commission said on Friday it would engage with the US to de-escalate tensions after the EU executive fined Google on Thursday over its dominance in the EU’s digital market, sparking an angry reaction from Washington.

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US Trade Representative Jamieson Greer said the EU’s fine jeopardised dialogue between the two sides of the Atlantic on digital regulation, as well as the trade deal that the US and EU struck last year after tough negotiations.

The Trump administration has persistently railed against the EU’s digital rules, accusing Brussels of imposing non-tariff barriers on US companies and disproportionately targeting American Big Tech.

However, the Commission’s chief spokesperson, Paula Pinho, said on Friday that the US had left the door open for talks.

“There’s a call for dialogue which we fully embrace,” she said, adding that Brussels would engage while making sure to preserve the EU’s regulatory “autonomy”.

‘The EU undermines dialogue’

Earlier this week, 25 US lawmakers wrote to US President Donald Trump calling for a US investigation into EU trade practices in advance of the anticipated fine against Google.

The fine was duly announced on Thursday, penalising the tech giant to the tune of €890 million under the EU’s Digital Markets Act, which Washington has relentlessly criticised over the past year, along with the Digital Services Act – an EU regulation targeting illegal content on large online platforms.

“We are trying to resolve our concerns with the EU’s Digital Markets Act and other actions through responsible, constructive dialogue,” Greer said in a statement after the fine was announced. “The EU’s recent actions undermine these efforts and pose a real risk to the continuation of transatlantic stability with respect to trade,” he added.

German Socialist MEP Bernd Lange, the European Parliament’s trade chief, told Euronews that he feared further escalation in transatlantic relations and expected additional action from the US.

The EU lawmaker was at the forefront of the negotiations to implement the EU-US agreement struck in July 2025 by Trump and Commission President Ursula von der Leyen after weeks of trade disputes. Yet despite the deal, EU officials still consider transatlantic relations volatile.

On Thursday, the White House announced a new tariff regime targeting its trading partners, including the EU, over forced labour allegations. While insisting it has stringent rules to combat products made with forced labour, Brussels chose not to retaliate, arguing that the new tariffs respected the 15 percent cap on EU goods set out in the trade deal.

Published on
24/07/2026 – 9:14 GMT+2

German Socialist MEP Bernd Lange, chair of the European Parliament’s trade committee, told Euronews that the EU should brace for further action from the US following the €890 million fine imposed on Google by the European Commission on Thursday.

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Tensions escalated across the Atlantic after US Trade Representative Jamieson Greer said the fine was “unreasonable” and created “uncertainty” for US-EU trade.

Brussels imposed the fine on the tech giant under the Digital Markets Act (DMA), which is designed to curb Big Tech’s dominance in the EU’s digital markets and has been a repeated target of US criticism since Donald Trump’s return to the White House.

“We have the tariff for the deal of Scotland and we have some regulation where everybody, not only US companies but also Europeans or whatever companies, has to respect it,” Lange said.

He added that both the DMA and the Digital Services Act (DSA) remain in Washington’s crosshairs and warned that the EU should prepare for retaliation.

“To be honest, I expect that some action will come,” he said.

Imposing tariffs over forced labour is ‘crazy’

The EU and the US have been bound since July 2025 by a trade deal struck in Scotland that imposes 15% US duties on EU goods while removing EU tariffs on US products.

Brussels, which hopes the deal will shield European businesses from Washington’s erratic decisions and tariff threats, had expected the US to announce a new tariff regime to replace the current one expiring on Friday and was prepared to accept it as long as it did not exceed the 15% cap.

Washington unveiled the new regime on Thursday, targeting trading partners around the world, including the EU, over forced labour.

According to Lange, the fact that the US targeted the EU over forced labour is “crazy”.

“We have a wonderful legislation, even stronger than the United States has,” he said.

However, he believes the new tariffs could eventually be challenged before US courts and hopes trade policy will return to the hands of Congress.

“I guess the courts in the United States will judge about that,” Lange said, adding: “I hope that after the midterms in November, the Congress will take over a little bit more like it is written down in the Constitution of the United States, Article 1, Paragraph 8, that trade policy is in the hands of the Congress.”

“I hope this will give us also additional stability.”

Published on
22/07/2026 – 12:17 GMT+2

The European Union is preparing to accept new tariffs the United States is expected to impose in the coming days over forced labour, as long as they do not exceed the 15 percent cap agreed under the Turnberry agreement, the European Commission said.

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The White House said in early June that it would impose fresh duties on its global trading partners, arguing that insufficient efforts to curb trade in goods produced using forced labour were harming US commercial interests.

The current US tariff regime expires on Friday, and US Trade Representative Jamieson Greer said on Tuesday that implementation of the forced labour duties was imminent.

European officials are closely monitoring the level of the new tariffs, as an EU-US trade agreement signed in July 2025 in Turnberry, Scotland, by US President Donald Trump and Commission President Ursula von der Leyen caps US duties on EU goods at 15 percent.

“Of course we do not agree with the findings on forced labour, and we’ve made that very clear to our United States counterparts,” an EU senior official said.

“But the main objective is to make sure that the agreement is respected and that our companies can benefit from the stability and predictability that was set out there.”

EU rules against forced labour

The Trump administration imposed 10 percent duties on its global trading partners last February after a US Supreme Court ruling declared its 2025 tariffs illegal. Added to the pre-existing Most-Favoured-Nation duties, those tariffs mean the EU is currently paying average duties close to the 15 percent ceiling set by the Turnberry agreement.

However, the current legal basis for the US tariff regime does not allow it to remain in force for more than 150 days – that is, until 24 July – unless Congress approves an extension, which is considered unlikely ahead of the US midterm elections.

As part of its effort to replace the current regime, the US Trade Department launched an investigation under Section 301 of the Trade Act of 1974 into forced labour in global supply chains, which is due to be concluded in the coming days.

“We expect to see some action soon,” Greer said on Tuesday on CNBC. “I can’t really specify a timeline right now – I have a responsibility to brief Congress and other stakeholders before I really reveal that kind of thing. But we do expect action soon on that front.”

In early June, the Commission defended its regulations, saying it had strict rules against products made with forced labour.

“The EU considers tariffs imposed on these grounds to be unjustified,” Olof Gill, the Commission’s deputy chief spokesperson, said in a statement at the time.

And yet, the Commission now appears to consider there is no better option than ensuring the Turnberry agreement is respected.

A year ago, European Commission President Ursula von der Leyen and US President Donald Trump struck a trade deal in Turnberry, Scotland, shaking hands under the spotlight of the world’s media after weeks of trade disputes.

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Defended by the Commission as the best deal it could secure, the agreement imposed 15 percent US tariffs on imports from the EU, while the EU committed to removing its duties on most US industrial products.

The Europeans also pledged to invest €520 billion in the US and purchase €700 billion in US energy by 2028, including liquefied natural gas (LNG), oil and nuclear energy products.

The Turnberry agreement was supposed to draw a line under the dispute. Instead, it opened a new chapter.

Over the past year, Trump has repeatedly threatened the EU with new tariffs, slowing the implementation of the agreement on the European side, where lawmakers froze its ratification. Following negotiations between the EU’s co-legislators, the bloc eventually removed its tariffs on 1 July.

On the US side, the process has been no smoother. The White House had to adopt new tariffs after the US Supreme Court ruled in February 2026 that the duties imposed on US trading partners in 2025 were illegal.

The new tariffs, introduced under a different legal basis, are set to expire at the end of this week, on 24 July, unless Congress extends them – a prospect considered unlikely with the midterm elections approaching.

As the Turnberry deal marks its first anniversary, here are four things to know about the state of transatlantic trade relations.

1. Trade with the US increased in 2025

Despite the tariff war, transatlantic trade has not shrunk. Quite the opposite: EU-US goods and services trade rose by 4.5 percent to €1.8 trillion in 2025, as companies rushed shipments ahead of Trump’s tariffs, offsetting the slowdown later in the year.

Since January 2025, US importers have had to pay around €31 billion in additional duties, compared with €7 billion in pre-tariff years.

Following the Supreme Court ruling, however, some have already been refunded. US data released in mid-July shows that $81 billion was paid back for tariffs imposed globally on the country’s trading partners.

2. Europe is on track to meet its investment pledges

According to the European Commission, the EU will keep its promise to invest massively in the US. In early 2025, it reported that EU companies had pledged €242 billion in investments across various US sectors, including cars, IT, chemicals and food.

Regarding energy investments, an EU senior official said the €700 billion target will be exceeded. The Commission said that, in 2025 alone, EU buyers imported energy products and signed deals worth more than $250 billion.

As the Iran war broke out and the EU phased out Russian gas supplies, purchases of US LNG and oil reached record levels. New nuclear projects will also be carried out in cooperation with US partners.

3. Negotiations continue on exemptions, steel and aluminium

The EU-US trade saga is far from over. Brussels and Washington have started negotiating new tariff exemptions for EU goods. The Turnberry agreement referred to these future discussions, but the White House wanted the EU to implement its side of the agreement before talks could begin.

Last autumn, the Commission, together with European businesses, drew up a list of hundreds of products for which it hopes to restore pre-existing tariff levels. The list, recently transmitted to the US side, covers around €150 billion worth of EU exports and includes iconic products such as Roquefort, olive oil, wines and spirits.

The Europeans also hope to make progress on steel and aluminium. The US still imposes 50 percent tariffs on imports from trading partners worldwide. However, the Commission expects the discussions to be challenging, as the White House wants to bring production back to the US while also dealing with massive Chinese overcapacity.

4. The US is preparing new tariffs

Following the Supreme Court ruling, the White House had to rely on a new legal basis to impose tariffs reaching the 15 percent ceiling set by the Turnberry agreement. But those tariffs expire on Friday, and the US is already looking for new ways to impose additional duties.

European officials therefore expect the White House to introduce new tariffs targeting forced labour and overcapacity following investigations launched under Section 301 of the Trade Act of 1974. The forced labour tariffs have already been announced and are expected to come first, despite the EU arguing that it already has legislation banning forced labour.

“Of course we do not agree with the findings on forced labour, and we’ve made that very clear to our United States counterparts,” an EU senior official said. “But the main objective is to make sure that the agreement is respected and that our companies can benefit from the stability and predictability that was set out there.”

So as long as those future tariffs don’t exceed the 15 percent cap, the EU will not go against them.

The Commission is also closely monitoring a US investigation into German drug pricing under Section 301, which could also lead to punitive tariffs if the US Trade Department finds that “persistent underpayment for innovative pharmaceutical products by Germany is unreasonable or discriminatory and burdens or restricts US commerce”.

Published on
17/07/2026 – 7:30 GMT+2

Restricting Chinese access to the EU’s market of 450 million consumers could undermine Beijing’s export-driven economy and pose a risk to the country’s political stability, German liberal MEP Engin Eroglu, chair of the European Parliament’s delegation for relations with China, told Euronews, arguing that China’s model is “flawed.”

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His comments come as tensions between Brussels and Beijing have ramped up in recent weeks. The EU has set an October deadlinewith China last month to discuss how they can reduce their trade imbalance, after the bloc’s deficit with China reached a record €1 billion in 2026.

With low-cost Chinese imports continuing to flood the EU market, the European Commission, which is negotiating on behalf of the bloc’s 27 member states, could impose measures to restrict access to the European market before the two sides reach a breakthrough.

“If Europe were to restrict access to its market even slightly, Chinese domestic companies would be affected—especially since China’s domestic consumption is stagnating,” the MEP told Euronews.

“China’s model is flawed despite dancing robots and great fanfare,” he added, referring to China’s display of technological prowess during its latest Lunar New Year gala, when a performance by humanoid robots drew global attention.

According to him, if Chinese companies had to lay off workers because of EU’s restrictions “this could lead to political problems for the Chinese government.”

“There is high youth unemployment”

The European Commission said on Tuesday that it intends to implement “unilateral” trade defence measures to protect the EU market from the surge of Chinese imports before the October deadline.

These measures could include tariffs and quotas on Chinese imports that threaten specific sectors of European industry.

After the US began closing its market to Chinese imports through tariffs in 2025, China redirected its industrial overcapacity to the EU, putting pressure on key sectors of European industry, including steel, cars and chemicals.

However, according to Alicia Garcia Herrero, chief economist for Asia-Pacific at French corporate bank Natixis, state-backed “zombie” companies accounted for more than 12% of all registered firms in China in 2026, more than double their share in 2018.

In a report published in early June, the Organisation for Economic Co-operation and Development (OECD) also said that Chinese companies receive between three and eight times more subsidies than companies in OECD member countries.

According to Eroglu, that model is far from sustainable, undermining Beijing’s claim to global dominance as it seeks to replace the US as the world’s leading economic and political power through an aggressive trade policy.

“There is already high youth unemployment. China’s current self-confidence may not reflect the actual situation. This means that by controlling access to our market, we hold leverage over China.”

The European Commission could also impose new anti-dumping duties on Chinese products, as it has done in several cases in recent years.

The number of unfair trade practice complaints filed by EU producers is rising, and for the first time, the EU’s trade enforcement authority opened an investigation last Thursday into the agricultural sector by targeting China’s Peking duck.

“I hope we can avoid a trade conflict, but the rapid decline of European industries makes it difficult not to react,” Eroglu said.

Published on
14/07/2026 – 13:50 GMT+2

Deputy Director-General for Trade at the European Commission Denis Redonnet told MEPs on Tuesday that the EU will step up measures against Chinese imports before the October deadline it set to protect the bloc’s market from Chinese overcapacity.

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The warning comes as Brussels started negotiations with Beijing last month to reduce its record-high €1 billion-a-day trade deficit with China, setting an October deadline for the two sides to make significant progress.

However, tensions remain high between the two trading partners, as Beijing has repeatedly threatened retaliation if the EU adopts measures closing its market to Chinese exports.

“Dialogue alone will not suffice,” Redonnet told EU lawmakers, adding that the EU needs to decide how “to protect and preserve the European industrial base.”

“We need to look at what the Chinese do. It is more than likely that we’ll have unilateral protection measures adopted atthe European Union level. So we’ll be taking various measures in parallel.”

The EU is fighting low-cost Chinese imports flooding its market and threatening its manufacturing industry in key sectors such as steel, chemicals, machine tools and electronics.

“What can we do ahead of that October deadline? We’ll look at a number of sectors, we’ll try to start rebalancing and rein in the export levels,” Redonnet said.

Quotas and tariffs to protect EU industries

To defend its steel industry, the EU doubled tariffs on certain steel imports on 1 July and reduced quotas for the sector. Similar safeguard measures could be used in other industries in the coming weeks, the senior EU official said.

He added, however, that safeguards require the backing of a majority of member states and that not all EU countries share the same interests. Some have factories directly threatened by Chinese competition, while others have industries that rely on cheap Chinese products.

“If we had to defend European manufacturing in two to three member states, we would need the backing of a majority of all member states. And those other member states may be focused on users’ interests rather than producers’ interests,” he said.

In parallel, to rebalance the situation among EU member states, the Commission is working on a solidarity mechanism to compensate those most affected by a surge in Chinese imports.

The EU executive also plans to defend the EU market product by product as China heavily subsidises its exports to the EU prompting the Commission to resort to anti-dumping and anti-subsidy duties.

Last Thursday, it launched an anti-dumping probe into Chinese Peking duck producers.

Reviewing and adjusting trade defence tools is part of the mandate EU leaders gave the Commission in mid-June, asking the EU executive to engage with China while keeping all options on the table to defend the EU market.

Published on 09/07/2026 – 17:14 GMT+2•Updated
17:19

The European Commission launched an investigation on Thursday into Chinese Peking duck after several EU producers complained of unfairly low prices harming their industry.

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Without disclosing their names, the Commission said that five EU producers had complained that China is unfairly subsidising domestic production via its five-year plan for agricultural modernisation.

The probe comes at a time of heightened tensions between Beijing and Brussels, as the EU seeks to shield its market from cheap Chinese imports, triggering Beijing’s ire as it aims to preserve access to the lucrative European market.

After China repeatedly threatened retaliation over several EU legislative proposals restricting access to EU public procurement and setting strict conditions on foreign investment, the two sides started negotiations last week to ease tensions.

However, the EU’s latest move targeting duck imports could disrupt the talks by hitting China’s agricultural sector for the first time.

It also said that the volume and prices of imports had a “negative impact on the quantities sold, the level of prices charged and market share held by the Union industry,” and that this had resulted in “substantial adverse effects on the overall performance” of the sector.

The Commission’s investigation could result in anti-dumping duties being imposed on Chinese producers to protect the EU market.

Anti-dumping and anti-subsidy duties are among the EU’s main trade defence instruments against China’s aggressive push into its market. However, EU leaders gave the Commission a mandate in June to step up efforts to reduce the EU’s €1 billion-a-day trade deficit with China. They want the EU executive, which has competence over trade policy, to review its trade defence tools and pursue a dialogue with Beijing that delivers tangible results.

EU Trade Commissioner Maroš Šefčovič met his Chinese counterpart, Wang Wentao, in Brussels last Monday to kick-start negotiations aimed at restoring a level playing field and addressing trade imbalances, which Brussels said had become “unsustainable”.

The EU already imposed tariffs on Chinese electric vehicles in 2024, triggering China’s investigations and sanctions targeting EU brandy, pork and dairy products.

The EU hopes to achieve a breakthrough in negotiations with Beijing by October, when Šefčovič is due to travel to China.

Published on
30/06/2026 – 12:27 GMT+2

The EU has allocated import quotas for steel to its trading partners on Tuesday in an attempt to fight growing overcapacity from foreign producers.

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The measure comes amid rising tensions between the EU and china China, where most of the global steel surplus originates.

Seeking to shield its market from global overcapacity, EU legislators agreed last April to increase existing tariff-free steel quotas to 18.3 million tonnes per year while doubling tariffs beyond those quotas to 50 percent

The EU’s closest allies, such as the UK, Switzerland and Ukraine, are concerned that their own exports to the EU could be drastically affected by the new measures, and have heavily lobbied the European Commission in recent weeks for preferential access to the EU market.

“We are providing market participants with predictability through clear and transparent quota distribution rules, while applying a fair and objective methodology,” EU Trade Commissioner Maroš Šefčovič said in a statement.

Protectionist move

The protectionist move comes as global steel overcapacity is expected to grow to 721 million tonnes by 2027, according to the OECD, a volume that could threaten jobs across the entire EU steel sector.

The EU came under even greater pressure last year when the US imposed 50 percent tariffs on steel imports, rerouting the global surplus to the European market.

“They built a wall around their market, steel was hitting that wall and was coming back to our market in greater numbers,” a senior EU official said. “That is why we introduced a safeguard measure which followed an investigation.”

The EU is also fighting unfair trade practices across the board with 80 other measures already in place, among them anti-dumping duties, most of which target cheap steel imports from China.

Pressed by its closest allies to ease the measures to their benefit, the Commission announced on Tuesday that half of the 18.3 million tonnes allowed to enter its market each year will be allocated to partners bound by free trade agreements with the bloc, including India, Switzerland and the UK.

Many of the countries that have clinched a trade deal with the EU will be allocated country-specific quotas proportionate to the volumes traded with the EU between 2022 and 2024.

A special status has also been granted to Ukraine to support the country while it remains at war and ensure a certain level of exports to the EU.

Although increasingly limited, China’s dependencies on the EU in strategic technologies have not disappeared.

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In today’s increasingly tense geopolitical environment, closing this gap has become an urgent priority for Beijing. The country’s 15th Five-Year Plan, unveiled last March, places technological self-reliance at the heart of its industrial strategy through 2030.

In semiconductors, aerospace technologies, pharmaceuticals, automotive chips, robotics and quantum computing, European companies still supply products that remain essential to China.

As trade tensions with Beijing intensify, could these dependencies give Europe leverage? Most experts are sceptical. China’s monopoly over rare earths — essential for Europe’s green technologies and defence industry — is a far more powerful weapon that could be used in retaliation against the EU.

“China really has a choke point when it comes to minerals, but we don’t have an equivalent choke point, which is very powerful,” Tobias Gehrke, an expert at the European Council on Foreign Relations, told Euronews.

In some sectors, China may achieve self-reliance within just a few years, according to expert Sam Goodman in a report published in May for the Brussels-based Martens Centre.

Euronews examined those sectors. Here are the technologies in which China still remains dependent on the EU.

Semiconductors

In the semiconductor supply chain, the EU has a jewel : ASML, the Dutch company with the highest market valuation ever recorded by a European company, boasting a market capitalization of more than €630 billion in 2026.

The company holds a near-monopoly on extreme ultraviolet (EUV) lithography machines, which are essential for manufacturing advanced semiconductor chips used in artificial intelligence and electric vehicles.

China’s dependence on ASML has already been exploited by the United States and the Netherlands, which have restricted sales of the strategic technology to Beijing. But China can still buy less advanced deep ultraviolet lithography machines, a segment in which ASML holds almost 90% of the global market, according to Gehrke. In 2024, for some of those products, up to 70% of shipments went to China.

However, China is moving quickly to catch up. It now requires that 50% of equipment used in new chip production capacity be sourced domestically, Gehrke wrote in a report published in March.

“The Chinese have set a target that they want to start producing their own chips, not using ASML machines by 2028,” Goodman told Euronews. “But they’re still going to be dependent on ASML to learn.”

Maintenance and repair of installed equipment in China also account for a significant share of EU suppliers’ revenues.

In the event of EU restrictions on semiconductor exports, Gehrke forecasts “potentially large” economic damage to China, particularly if servicing were restricted, “but great spill-over risks,” as a significant share of ASML’s revenue is exposed.

Aerospace

The Comac C919 narrow-body airliner is China’s answer to the widely used passenger jets produced by U.S. manufacturer Boeing and European rival Airbus. But its supply chain remains heavily dependent on European companies.

Goodman lists several of them, including France’s Safran, which produces its engine, Germany’s Liebherr Aerospace, which supplies its cabin pressure system, and Italy’s Avio Aero, which manufactures the engine casing.

“Without the participation of these companies, China wouldn’t have a civil aviation programme,” Goodman said. “Civil aviation is very complicated to begin with, with safety standards very high; it takes a long time to get the know-how needed to do it.”

However, despite China’s dependence on European suppliers, any attempt to weaponise the supply chain could also come at a cost for Europe.

“It will hurt the bottom line of European aerospace suppliers which do very well out of China,” Goodman told Euronews. But he argues that the alternative is to “accept basically that China learn all our technology, create rivals and then destroy our market share”.

Competition between Chinese and European manufacturers is already intense.

A quiet battle is emerging over certification, with China seeking approval from the European Union Aviation Safety Agency (EASA) to allow the C919 to operate in Europe.

“This is a leverage for Europe which could politicise the process and refuse China’s aircraft certification”, Gehrke said. But Beijing is already playing the same game, slowing down the certification of new Airbus aircraft in China.

As of now, Airbus has more than 2,200 aircraft in service in mainland China, holding roughly a 55% market share.

Pharma and biotechnology

Europe still leads China in pharmaceutical patents. “In 2024, companies in Italy, Germany and France alone had double the number of pharmaceutical patents granted compared to China,” Goodman said.

The expert added that EU companies continue to dominate the vaccine market, with Germany’s Merck, France’s Sanofi and Britain’s GSK “accounting for 51 percent of global vaccine market share in 2024″.

However, according to figures from LEEM, the French pharmaceutical industry association, China’s R&D investment grew by 16.2% annually between 2020 and 2024—twice the pace of Europe—allowing it to account for more than one-third of new molecules produced by global pharmaceutical research in 2024.

Some EU companies have also established joint ventures and R&D partnerships to benefit from China’s research spending and lower manufacturing costs, including Germany’s Bayer and France’s Sanofi.

Which side benefits the most from joint ventures? “Always China,” Goodman said. “I’ve found no example of a joint venture between a Chinese company and a non-Chinese company where the non-Chinese company has benefited from technology transfer.”

When it comes to medical equipment, EU companies such as Siemens Healthineers and Philips remain global leaders in magnetic resonance imaging (MRI), although both have significantly expanded their manufacturing footprint in China.

“Local competitors are catching up rapidly,” Gehrke said, but he added that “there is still a gap in key upstream MRI components – such as superconducting magnets and image-processing software.”

Automotive chips

Chinese flagship automakers such as BYD and Chery also depend on European technologies, including chips from Germany’s Infineon, the Netherlands’ NXP and Franco-Italian STMicroelectronics.

China’s strategy is to become self-reliant in the sector, but Goodman said that the “domestic demand for EVs and the chips within them has meant that automotive companies in the PRC [People’s Republic of China] face an import substitution challenge”.

But the EU’s leadership in these niche technologies remains precarious.

“Europe is strong in mature automotive chips because they do produce power electronics sensors, but there are still very high vulnerabilities in certain parts of the supply chains, mainly in the back-end manufacturing part,” Giulia Albini from CLEPA, the European Association of Automotive Suppliers, told Euronews.

The EU depends on other regions—including China—for packaging, assembly and testing, as last year’s dispute over Dutch-based Nexperia, owned by China’s Wingtech, revealed. Following the Netherlands’ takeover of the company, China restricted chip exports to the EU.

Goodman added that the significant share of Chinese customers, as well as EU carmakers operating in China, makes it “unlikely that this leverage could be utilised”.

Robotics and quantum

Robots are China’s latest showcase of technological progress. Few will forget Chinese humanoid robots taking centre stage during televised Lunar New Year celebrations.

But Goodman said that a sizeable portion of the downstream supply chain, including the components that make the robots move, is produced by European companies, including Sweden’s Ewellix and Germany’s Rexroth.

“The leading Chinese humanoid robotic companies do not publish their supply chain for this very reason,” Goodman said.

However, he added that, in any case, the narrative of a self-sufficient Chinese humanoid robot sector “ready to take the world by storm” should be examined carefully.

When it comes to quantum computing, designed to carry out complex calculations faster than classical computers, Goodman said that China wants to keep working with Europeans to meet its industrial and commercialisation targets.

However, EU member states remain divided over the merits of partnering with China in what is regarded as the next major technological frontier after the AI boom.

“The French, the Dutch, the Germans have very rigorous export controls on materials that could be used for quantum computing by China, while the Spanish and the Italian have active projects with Chinese companies developing quantum in Europe,” Goodman said.

“Unless we have a unified approach, inevitably China is going to gain the system.”

As the European Union tries to fight its record-high €1 billion deficit per day with China, the bloc’s leaders are increasingly pointing to the problem of currency manipulation, which they say Beijing is using to make products even cheaper on the EU market – which is already flooded with Chinese imports.

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“An artificially low currency is an advantage for those who want to improve their economic competition positions,” German Chancellor Friedrich Merz said after the European Council summit on 19 June.

The matter of the Chinese currency and its management was also high on the agenda of last week’s G7 summit in France.

The signs are that this is a new front in Europe’s trade battle against Beijing. To understand why the devaluation of the yuan (or renminbi) matters, here are three things to know.

What’s wrong with the Chinese currency?

According to a report by the Haut Commissariat à la Stratégie au Plan, a French government advisory body, the undervaluation of the yuan is estimated at around 20-25 percent.

“While there is no universally recognised method for determining unequivocally whether a currency is significantly overvalued or undervalued, the assessment that the renminbi (RMB) is significantly undervalued is now widely shared, including among international institutions,” the report said.

In theory, China’s trade surpluses should naturally create demand for the yuan, leading to an appreciation of the currency, but it is not the case.

However, the devaluation of the yuan might not be the direct result of central bank intervention. Alicia Ferro Herrera, an expert at the Brussels-based think tank Bruegel, told Euronews that China prevents its currency from appreciating faster by not bringing all of its export revenues back to the mainland.

“They stay in Hong Kong and they are not converted into RMB,” she said.

How does it impact trade between China and the EU?

The EU deficit with China hit a record-high €359.9 billion in 2025. That same year marked the first time that all EU member states had a trade deficit with Beijing, including Germany, the EU’s largest economy.

“This is simply not sustainable,” European Commission President Ursula von der Leyen said last Friday.

According to the Haut Commissariat au Plan report, the undervaluation of the yuan plays a large part in keeping Chinese products competitive; as things stand, they are assessed by EU industry to be around 30-40 percent cheaper than European equivalents.

However, Ferro Herrera pointed out that the inflation differential also plays a great part.

“My estimate is that the inflation differential and its accumulation in Europe since the invasion of Ukraine explains about three quarters of the loss in external competitiveness,” she said.

What can the EU do?

In his remarks last Friday, Merz suggested the EU begin dialogue with China on the currency issue.

“We have to talk about this topic with each other,” he said. “It is in the interest of both sides.”

The German chancellor cited the 1985 Plaza Agreement, which saw the US, Japan, West Germany, the UK and France agree to depreciate the US dollar against the Japanese yen and the Deutsche Mark. The goal was to head off a protectionist turn from the US as its trade deficit deepened.

Merz also referred to the European Monetary System, which before the adoption of the euro relied on exchange-rate bands to limit currency fluctuations.

“That was a system where countries could coordinate through exchange-rate corridors,” he said.

Conversely, Ferro Herrera points out that the US did not push for any such negotiation when economic imbalances were discussed during the G7 last week.

In her view, Europe should monitor China’s export prices for major sector-by-sector deviations, since this is an important sign of overcapacity, as negative price growth occurs when goods cannot be sold.

Published on
11/06/2026 – 17:25 GMT+2

German MEP Bernd Lange, chair of the European Parliament’s trade committee, has warned that the long-running Airbus-Boeing dispute could jeopardise the EU-US trade agreement struck last summer if transatlantic tensions flare again in the coming weeks.

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The implementation of the Turnberry Agreement, clinched in July 2025 by US President Donald Trump and European Commission President Ursula von der Leyen in Scotland, is entering its final stretch, with EU lawmakers expected to approve it in a vote next Tuesday.

However, the five-year truce between US aerospace giant Boeing and its European rival Airbus over mutual subsidy allegations expires on 11 July, with the Trump administration and the European Commission yet to agree to extend it.

“Will this lead to another escalation? Nobody knows,” Lange, the Parliament’s lead negotiator on the EU-US deal, told journalists on Thursday during a meeting with fellow Socialist lawmakers.

The MEP is concerned that a renewed aerospace dispute could further strain transatlantic trade ties after a year of intense tensions.

“I hope this will not blow up,” Lange told Euronews.

Turnberry deal remains fragile

The battle between Boeing and Airbus dates back more than two decades. The US first brought a case before the World Trade Organization arguing that the EU was illegally subsidising Airbus. Brussels responded with its own complaint, accusing Washington of unlawfully supporting Boeing.

The dispute eventually spiralled into a tariff war, with both sides imposing punitive duties on products ranging from wine and spirits to cheese and tobacco, affecting $11.5 billion worth of trade.

A truce was reached in 2021 under the Biden administration, taking effect on 11 July that year and suspending retaliatory measures for five years. However no extension has been announced since.

“Discussions with the US are ongoing to ensure stability and certainty and to continue the suspension of countermeasures on both sides,” Commission deputy chief spokesperson Olof Gill told Euronews.

In its Trade Policy Agenda 2026, the Trump administration said the US Trade Representative would decide in July “whether to take action in the Section 301 investigation involving the enforcement of US rights in the World Trade Organization disputes involving large civil aircraft”.

The US is able to impose tariffs on trading partners under section 301 of the Trade Act of 1974.

Last week, Washington threatened to impose 10 percent tariffs on EU goods over forced labour following a Section 301 investigation. If implemented, those duties would be added to existing most-favoured-nation tariffs, pushing average US tariffs on EU goods above the 15 percent ceiling agreed under the Turnberry deal.

Under the agreement, which EU lawmakers are expected to adopt next week, the EU committed on its side to eliminate its duties on US goods. However, lawmakers fought hard to include safeguards to protect the deal from future US tariff threats and ensure the 15 percent cap is respected.

The agreement has always appeared fragile. Trump has repeatedly used tariffs as leverage in non-trade disputes, from his push for the acquisition of Greenland earlier this year to his more recent threat to impose 25 percent tariffs on EU cars after German Chancellor Friedrich Merz criticised the war with Iran.

Should the Airbus-Boeing dispute reignite, it could give the US president another pretext to unravel the 2025 agreement.

European Commission President Ursula von der Leyen, European Council President Antonio Costa and with South Korean President Lee Jae-myung celebrated the signing of new a digital trade agreement at a ceremony in Brussels on Wednesday.

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The event marked the EU and South Korea’s 11th summit, with everything from security and defence to trade on the agenda.

“Korea is one of Europe’s closest partners in the Indo-Pacific region and on the global stage,” von der Leyen said. “In today’s uncertain world, stable and trusted partnerships like ours are more precious than ever.”

The trio released a joint statement extolling the value of the talks and committing the two sides to a firm and friendly relationship.

“We reaffirm our shared commitment to effective multilateralism, and to a stable and predictable rules-based free and fair economic order,” the statement reads.

The semiconductor factor

Both sides have an interest in diversifying their trade relationships at a time of growing tensions with both China and the US, and the EU-South Korea digital trade agreement comes more than a decade after a landmark free trade deal.

Since 2015, trade between the EU and South Korea has doubled, with goods trade reaching approximately €124.25 billion in 2025, according to figures from the European Commission.

“The European Union-Korea Free Trade Agreement remains one of the European Union’s most successful trade agreements since its entry into enforcement in 2011,” European Council António Costa said on Wednesday.

South Korea is becoming an increasingly important investor in Europe, particularly in strategic sectors such as batteries, electric vehicles and semiconductors.

For the EU, a key objective is to secure semiconductor supply chains while attracting further investment from Korean companies into Europe.

“Korea has a global leadership position in semiconductors,” an EU official said. “This is clearly an area with significant potential for cooperation that would benefit both sides.”

The digital trade agreement concluded on Wednesday is expected to complement the broader trade partnership by reducing “unnecessary barriers to digital trade” and providing greater “legal certainty” for businesses operating across the two markets, according to another EU official. It will facilitate cross-border data flows while prohibiting the mandatory transfer of source code.

The deal is also designed to establish robust online consumer protection rules, though both partners intend to maintain their respective levels of protection for personal data and privacy.

Economic security was also high on the summit agenda, with the two sides agreeing to establish a high-level dialogue on supply chain resilience.

Supply chains came under pressure last year following China’s restrictions on exports of strategic materials, including rare earths – essential for green technologies and the defence sector – as well as products linked to the chip industry, which are critical to automotive manufacturing.

Security and defence

One thing that did not get over the line was a security of information agreement, which had been touted by EU officials prior to the summit as a means of strengthening the flow of classified information between Brussels and Seoul.

“I hope that the security of information agreement will be adopted soon, so that Korea and the EU can share confidential information safely, which will allow the two sides to engage in industrial and research cooperation actively through information exchange exchange,” President Lee said on Wednesday.

The agreement would build on the Security and Defence Partnership agreement that South Korea and the EU signed in 2024. That deal was designed to facilitate cooperation in areas spanning maritime security, countering hybrid threats, fighting foreign information manipulation and interference, and more besides.

In the run-up to this week’s talks, a senior EU official said a key topic of the discussions will be nuclear non-proliferation, as North Korea continues to hold a small but concerning stockpile of nuclear-armed warheads.

North Korea (the DPRK) and Russia were considered “big questions” at the summit, the source said, with Brussels ready to share information on its support for Ukraine with Seoul.

The joint statement from the summit reiterates this, with words of condemnation directed at North Korea and other nations who enable Russia to sustain its war of aggression against Ukraine.

“We urge Russia and the DPRK to immediately cease all such activities and abide by the UN Charter and all relevant United Nations Security Council resolutions,” the statement reads.

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.”

Published on 27/05/2026 – 12:10 GMT+2•Updated
12:17

One week after EU diplomats and lawmakers agreed to eliminate EU duties on most US industrial goods under the EU-US trade agreement, EU ambassadors on Wednesday greenlit a deal with the European Parliament, paving the way for the full agreement’s formal adoption by the EU Council.

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The procedural step comes as the US pressures Europeans to implement the EU-US deal clinched last summer by US President Donald Trump and European Commission President Ursula von der Leyen after weeks of renewed trade tensions.

Trump has threatened to impose 25 percent tariffs on EU cars if the deal is not enforced by the EU by 4 July.

On their side, MEPs still have to formally endorse the agreement reached on the EU side, with a tentative vote scheduled during the plenary session between 15 and 18 June.

“The agreement we reached with the European Parliament marks an important step in delivering on the EU’s commitments,” said a spokesperson for the Cypriot Presidency, which negotiated with MEPs on behalf of EU member states.

The spokesperson added that “robust safeguards” had been included in the agreement “to protect the interests of European businesses and economic operators”.

The deal, considered lopsided by many MEPs, states that the EU would face 15 percent US tariffs while eliminating its own duties on US goods.

However, after Trump repeatedly threatened to impose new tariffs in breach of the deal, EU lawmakers pushed member states to include conditions such as a “sunset” clause that would terminate the agreement on 31 December 2029 unless renewed.

Under the agreement reached last week, the Commission would also be able to suspend the trade deal at the request of either Parliament or a member state if the US fails to lift tariffs on European steel and aluminium products by the end of 2026.

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.

European Commission President Ursula von der Leyen and European Council President António Costa signed on Friday a revamped trade deal with Mexico as part of the EU’s efforts to expand its influence in Latin America, shortly after the Mercosur pact entered into force.

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The deal was signed at an EU–Mexico summit in Mexico, with von der Leyen and Costa joined by the country’s President Claudia Sheinbaum, amid rising geopolitical tensions and shifting global alliances following the return of US president to the White House.

The economic partnership between the two medium-sized powers reflects efforts on both sides to reduce their dependence on the US — the EU’s and Mexico’s largest trading partner—and on China, for which Mexico has become a hub for electric vehicle production.

“The EU and Mexico are committed to a close strategic partnership,” von der Leyen said, adding: “Today’s modernised Agreements set out our shared vision of the future and will deliver many benefits for both sides.”

The EU–Mexico trade deal strengthens the EU’s diversification strategy by updating a 20-year-old agreement that had already eliminated tariff barriers on bilateral trade.

Under the new deal, the EU will access new markets for products, such as agri-food (pork, dairy, cereals, fruit and pasta), pharmaceuticals and machinery.

EU tightens trade ties in Latin America

Mexico is the EU’s second-largest trading partner in Latin America and the EU is Mexico’s second-largest export market. Trade between both sides reached €86.8 billion in goods in 2025, alongside €29.7 billion in services in 2024.

The figures remain far smaller than Mexico’s trade with its neighbour, the US, which exceeded $900 billion in goods and services in 2024. But the deal comes as Mexico faces mounting pressure from a more protectionist White House.

For its part, the EU has been grappling with repeated tariff threats from Trump despite a trade deal clinched in 2025.

“At a time of growing global uncertainty, the EU and Mexico are choosing openness, partnership and ambition,” EU trade Commissioner Maroš Šefčovič, who was also in Mexico City, said. He pointed out that more than 43,000 European companies export to Mexico, while over 11,000 EU companies operate in the country.

On agriculture, the pact will open up new markets for Mexican products such as coffee, fruit, chocolate and agave syrup.

A total of 568 European and 26 Mexican geographical indications will also be protected, alongside the opening of public procurement markets, according to the Commission.

With this new deal, the EU also wants to signal its strengthened presence in Latin America, where China has expanded its influence.

“97% of the GDP of Latin America and the Caribbean will be covered by sophisticated preferential agreements with the European Union,” a senior EU official said, adding: “There is no other region in the world that has such a dense and connected network of agreements.”

The EU has already built new trade ties with Argentina, Brazil, Paraguay and Uruguay through the Mercosur trade agreement, which provisionally entered into force on 1 May and liberalises trade flows between the EU and those countries.

However, its signing has faced strong opposition from EU farmers, who fear unfair competition from Latin American imports, and ratification was suspended after MEPs challenged the agreement before the EU Court of Justice.

Brussels argues the Mexico agreement should avoid the backlash faced by Mercosur because sensitive agricultural imports remain capped through tariff quotas.

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.

The European Commission on Thursday cut its 2026 growth forecast for the European economy, as the ongoing conflict in the Middle East drives energy prices sharply higher.

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The EU economy is now expected to grow by just 1.1% in 2026, down from the 1.4% projected in the Commission’s autumn forecast. The eurozone outlook was revised down further to 0.9%.

In its report, the Commission warned that disruption to global energy markets — caused by escalating tensions around the Strait of Hormuz, one of the world’s key oil and gas shipping routes — has significantly worsened Europe’s economic outlook.

“Before the end of February 2026, the EU economy was expected to continue expanding at a moderate pace, alongside a further decline in inflation,” the report said. “However, the outlook has changed substantially since the outbreak of the conflict.”

Inflation is also expected to rise sharply due to the disruption around Hormuz.

EU inflation is forecast to reach 3.1% this year — a full percentage point higher than previously expected — driven mainly by soaring energy costs after oil and gas prices surged amid fears of supply disruptions in the Gulf.

For EU officials, the shock recalls 2022, when Russia’s invasion of Ukraine triggered Europe’s worst energy crisis in decades.

The Commission described the latest turmoil as “the second such shock in less than five years”, warning that Europe’s dependence on imported fossil fuels leaves it highly vulnerable whenever geopolitical tensions threaten global energy supplies.

Consumer confidence has already fallen to a 40-month low, according to the forecast, as households prepare for higher heating and fuel bills while businesses face rising operating costs and weaker demand.

Investment is also expected to slow as companies confront tighter financing conditions and growing uncertainty. Export growth is weakening as global demand softens.

Despite the deteriorating outlook, Brussels said the bloc is better prepared than during the Ukraine-related energy crisis, thanks to years of investment in renewable energy, lower gas consumption and efforts to diversify away from Russian supplies.

“The push towards supply diversification, decarbonisation and lower energy consumption has left the EU economy better placed to absorb today’s shock,” the Commission said.

However, EU officials acknowledged that risks remain heavily skewed to the downside.

The report warned that prolonged disruption in the Strait of Hormuz or across wider Middle Eastern supply chains could drive energy prices even higher, derail the expected easing of inflation in 2027 and potentially stall Europe’s recovery altogether.

The Commission also cautioned that shortages of refined oil products, fertilisers and other industrial inputs could spread through global supply chains, increasing food and manufacturing costs across Europe.

Meanwhile, European governments are preparing for growing fiscal pressure. Public deficits across the EU are expected to widen as governments increase spending to protect households from rising energy bills while also boosting defence expenditure amid mounting geopolitical instability.

Italian Prime Minister Giorgia Meloni has recently urged the European Commission to relax fiscal rules for households and industries struggling with soaring energy costs, arguing that energy security should be treated with the same urgency as defence spending.

At the centre of Rome’s request is the EU’s national escape clause, adopted on 8 July, which allows member states temporary fiscal flexibility to increase defence spending under exceptional circumstances.

Meloni said Brussels had already shown a willingness to loosen budget rules in response to Russia’s war in Ukraine and growing concerns about Europe’s military preparedness. Italy is now seeking similar flexibility for emergency energy measures.

Published on 20/05/2026 – 2:31 GMT+2•Updated
2:36

Diplomats and MEPs reached an agreement late on Tuesday to implement the contentious EU-US agreement, which eliminates duties on most US industrial goods imported into Europe.

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The negotiations concluded two weeks after US President Donald Trump threatened to impose 25% tariffs on EU cars if Europeans did not implement the agreement — clinched by Trump and European Commission President Ursula von der Leyen in Turnberry, Scotland, last summer — by 4 July.

The so-called “Turnberry Agreement,” criticised by MEPs as unbalanced, raises US tariffs on EU goods to as much as 15%.

“The EU and the United States share the world’s largest and most integrated economic relationship. Maintaining a stable, predictable and balanced transatlantic partnership is in the interest of both sides,” Cyprus trade Minister Michael Damianos said, adding: “Today, the European Union delivers on its commitments.”

MEPs had kept the deal frozen for several weeks following Trump’s threats over Greenland earlier this year. They also suspended it after the US adopted new tariffs following a Supreme Court ruling that declared illegal the tariffs imposed by the White House since Trump’s return to power.

Demanding clarity from the Americans, EU lawmakers finally agreed to enter into negotiations with the EU Cyprus presidency — representing EU member states — after the Commission assured them that the US would honour its side of the agreement and cap its tariffs at 15%, as agreed.

Fragile EU-US relations

However, EU-US relations remain fragile and there is concern in Brussels that the US administration could still use tariffs to put political pressure on the EU if the bloc does not comply with the White House’s demands on other issues.

Trump’s threats over EU cars two weeks ago also targeted Germany, whose Chancellor Friedrich Merz has criticised the war in Iran launched by the Americans alongside Israel.

Trump has repeatedly called on European countries to deploy ships to help secure the Strait of Hormuz, a move Europeans have been reluctant to make.

Many disagreements also continue to strain EU–US relations over Ukraine — including the recent US extension of a sanctions waiver allowing purchases of Russian oil — and over NATO, which Trump has repeatedly threatened to leave.

On Tuesday night, MEPs tried to secure the deal by attaching conditions, risking US anger with additional provisions to which Washington had not agreed.

Under the Turnberry Agreement, the EU also committed to investing $600 billion across strategic sectors in the United States through 2028 and to purchasing $750 billion worth of US energy.