BRUSSELS — The EU will step up efforts to reduce its economic reliance on China and protect its industries from a glut of cheap imports, under new proposals drafted by Brussels that are due to be discussed by leaders next month.
Officials from the European Commission’s Directorate-General for Trade were tasked with drawing up a “more assertive and effective trade defense policy” to deal with Beijing, according to a document circulated within the executive, the contents of which were shared with POLITICO.
Among the options being considered are identifying additional sectors for “safeguard investigations,” it reads, in which the EU would assess how imports may be harming local industry and whether tariff quotas could be imposed. Brussels has set safeguards in the past for steel and ferroalloys, but future probes could look at other industries too.
The push would also accelerate work on a so-called overcapacity instrument to deal with state-subsidized firms producing vast quantities of goods in strategic sectors, making it virtually impossible for other industries to compete.
Such a mechanism has been under discussion for some time, but is perceived as risky as it would likely run afoul of World Trade Organization rules, which generally bar members from discriminating against single countries.
According to two EU officials working on the proposals, granted anonymity to speak frankly, the plans will first be discussed and refined by commissioners at an “orientation debate” on May 29. EU leaders are then expected to discuss China’s export curbs on critical raw materials — essential for everything from wind turbines to car batteries — at a G7 summit in France that begins June 15, providing political direction for the EU executive.
Following that, the Commission will seek input from EU heads of government at a European Council on June 18 in Brussels. A draft agenda for the summit, obtained by POLITICO, includes the issue as part of discussions about how to “push forward EU competitiveness and strategic autonomy in the challenging geoeconomic context” and tackle “global macroeconomic imbalances.”
Trade headwinds
With European industry facing powerful geoeconomic headwinds, “the political appetite might be there now in some member states that were reluctant before,” said one of the officials of the push to toughen the EU’s trade stance toward Beijing. While the Commission has long sought new powers to deal with the issue, some capitals have actively resisted the push, as it could roil relations with Beijing.
Securing the support of Germany, which has historically sought to avoid trade escalation with China, would be key. Berlin is suffering industrial decline as Beijing strengthens its hold on clean technology, carmaking and manufacturing sectors — and is particularly exposed to any new restrictions on rare earth sales.
The EU’s bilateral trade deficit with China widened to €359.3 billion in 2025, up nearly a fifth from the previous year. European industrial sectors, from chemicals to automotive, are shedding jobs and scaling back production, undercut by a glut of lower-priced Chinese goods.
The departure of Hungarian Prime Minister Viktor Orbán, who courted China for investment, also creates a new opportunity for officials to get sign-off on the plans. However, Spanish Prime Minister Pedro Sánchez, who made his fourth visit to China in as many years in April, is positioning himself as a leading advocate for friendlier relations with Beijing.
Fear of deindustrialization has gripped Brussels, which has responded with a succession of initiatives aimed at reducing the bloc’s dependence on the world’s biggest exporter. Earlier this month, Brussels announced a clampdown on EU funding for Made-in-China solar inverters — critical renewable energy tech.
The Commission’s proposed Industrial Accelerator Act would see tough new screening rules on Chinese investment, while a revision of the Cybersecurity Act aims to push European capitals to reduce their use of Chinese tech champions such as Huawei. Beijing has threatened retaliation in response.
However, if it wants to meaningfully dent the growing trade imbalance, the Commission would need new trade powers to stem the flow of Chinese goods into the single market.
EU Commission plans new squeeze on Chinese trade
Source: Viral Showbiz Pinay
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