Details
- EU leaders discussed stronger trade-defence measures during a summit in Brussels amid rising concern over Chinese exports.
- The European Commission wants faster powers to respond when specific sectors are flooded with low-cost imports.
- European officials argue that Chinese state subsidies and currency policies give Chinese manufacturers an unfair competitive advantage.
- The EU’s trade deficit with China reached a record €360 billion in 2025 and is projected to approach €400 billion this year.
- German Chancellor Friedrich Merz warned that China’s currency remains significantly undervalued, creating a major competitive disadvantage for European companies.
- French President Emmanuel Macron has called for a European mechanism similar to the US Section 301 trade tool, which allows action against unfair trade practices.
- European Commission President Ursula von der Leyen said the bloc will work on new instruments, including measures to help companies diversify supply chains and reduce trade risks.
- Germany’s machinery and automotive sectors are under growing pressure from Chinese competitors both in Europe and in the Chinese market.
- Germany and Spain remain cautious about steps that could provoke retaliation from Beijing or trigger a wider trade dispute.
- China has retaliated against previous EU action, including duties on European cognac after the bloc imposed higher tariffs on Chinese electric cars.
- EU officials said dialogue with China will continue alongside efforts to strengthen Europe’s trade-defence framework.
What Else
The Commission is expected to develop options for new trade-defence measures, but any proposal would need political backing from member states. The dispute could shape how far Europe is willing to go in protecting strategic industries while preserving access to Chinese markets and supply chains.
