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.
