The European Fee is stepping up efforts to guard regional manufacturing from the chance of Chinese language overcapacity, as Chinese language merchandise flood the EU market and threaten 1000’s of jobs.
The transfer got here as China Customs information confirmed China amassed a $113 billion surplus with EU-27 nations within the first 4 months of 2026, up from $91 billion in the identical interval in 2025. The excess widened by $22 billion in 12 months, however the EU’s commerce deficit with China had already reached 359.9 billion euros in 2025.
Stress on Brussels has additionally elevated as Beijing has repeatedly threatened retaliation in latest weeks over a number of EU legal guidelines proscribing Chinese language corporations’ entry to the only market.
China on Friday additionally barred these corporations from partaking with the European Fee over the EU’s overseas assist investigation.
EU commissioners are scheduled to debate the difficulty on Might 29 in a bid to handle the China concern and restore a degree enjoying area. What choices do we now have in Europe?
1. Break dependence on Chinese language components
monetary instances newspaper A plan to drive EU corporations to purchase vital elements from at the least three totally different suppliers is into account by the European Fee, it reported on Monday.
The thought is to set a threshold of about 30% to 40% of what could be bought from a single provider, with the remaining all having to come back from at the least three totally different suppliers and never from the identical nation.
The proposal comes after China final 12 months restricted exports of uncommon earths and chips, that are vital to key EU industries reminiscent of inexperienced expertise, vehicles and defence.
2. Goal strategic areas with tariffs
In its financial safety technique revealed in December, the European Fee additionally mentioned it could current new measures by September 2026 to strengthen the safety of EU business from unfair commerce insurance policies and overcapacity.
“If we consider that each European job, each European firm, each open sector is being handled unfairly, we are going to struggle tooth and nail,” Maroš Šefčović informed Euronews.
The choice to impose new quotas and double tariffs on international metal imports, largely made up of China’s extra capability, had already been agreed by EU nations and the European Parliament in April.
The chemical business is at the moment attracting consideration. China’s chemical imports have soared by 81% in 5 years. Nevertheless, the EU’s chemical substances sector can also be depending on exports overseas, together with China, the business’s fourth largest export market, complicating any measures focusing on China.
“As an export-oriented business, the European chemical business earns greater than 30% of its gross sales overseas, which places it vulnerable to retaliation from third nations,” Philipp Sauer, a commerce professional at European chemical business lobbying group Cefic, informed Euronews.
3. Imposing anti-dumping or anti-subsidy duties on imported items
The European Fee can even impose tariffs on Chinese language corporations if their import costs fall beneath the worth at which they promote their merchandise on the home market. Firms that obtain unfair subsidies can be investigated.
However investigations can take as much as 18 months, and the fee’s DG Commerce is overwhelmed with instances and has solely about 140 workers out there.
Sauer mentioned between one-third and half of all ongoing investigations are associated to the chemistry division.
4. Use of coercive prevention measures
Anti-coercion measures are instruments of final resort, the so-called commerce bazooka, which can be utilized within the occasion of financial stress from third nations, permitting the EU to assault China with sturdy measures, reminiscent of proscribing entry to intra-EU licenses and public procurement.
Nevertheless, its use requires the help of a certified majority of member states, which isn’t assured.
Germany opposed the EU’s tariffs on Chinese language electrical automobiles in 2024. Spanish Prime Minister Pedro Sánchez, who has visited China 4 instances in three years, additionally helps nearer ties with China in a bid to safe main Chinese language funding.
5. Unification of member states
On the identical time, Brussels faces the chance that its decoupling technique might face important resistance from nationwide governments. EU member states stay divided over learn how to strategy China, which might lead to Beijing constructing capital ties with each other.
Such variations are already seen within the info and communications expertise (ICT) sector, the place the EU is proposing a brand new mechanism to require the phase-out of so-called high-risk suppliers reminiscent of Huawei and ZTE in strategic industries reminiscent of telecommunications.
The proposal is included in an modification to EU cybersecurity legislation and has sparked controversy amongst a number of European governments, notably Spain and Germany. These governments have lengthy labored with Chinese language-made tools that’s now deeply embedded of their digital infrastructure.
This risk-averse technique additionally raises monetary issues, as Chinese language suppliers are usually less expensive than European options reminiscent of Ericsson and Nokia, partially as a result of they obtain public subsidies from the Chinese language authorities.
European carriers are asking the EU for monetary compensation to exchange Chinese language-made tools, following the instance of the US’s “rip and substitute” programme, however neither the EU nor governments appear eager on placing cash on the desk.
In different phrases, the EU’s full separation from China might come at important political and financial prices.
It stays to be seen whether or not European nations are prepared to place up with it.
