As trade war with China looms, how can the EU defend itself?

As Chinese-made products are flooding the EU marketplace and threatening thousands of jobs, the European Commission is stepping up its enactment to support the bloc’s accumulation from the risks of China’s excess production.

The determination comes arsenic information from Chinese customs showed that, successful the archetypal 4 months of 2026, Beijing accumulated a surplus of $113 cardinal with the EU-27, up from $91 cardinal implicit the aforesaid play successful 2025. The surplus widened by $22 cardinal implicit 12 month, portion the EU’s commercialized shortage with China had already reached €359.9 cardinal successful 2025.

Pressure is besides mounting connected Brussels arsenic Beijing has repeatedly threatened retaliation successful caller weeks implicit respective EU laws limiting entree to the azygous marketplace for Chinese companies.

On Friday, China besides banned these companies from engaging with the Commission implicit EU overseas subsidy investigations.

To code the China contented and effort to reconstruct a level playing field, EU Commissioners are acceptable to statement the substance connected 29 May. What options does Europe person connected the table?

1. Cutting dependence connected Chinese components

The Financial Times reported connected Monday that a program to unit EU companies to bargain captious components from astatine slightest 3 antithetic suppliers was successful the pipeline astatine the European Commission.

The thought would beryllium to acceptable thresholds of astir 30% to 40% for what tin beryllium bought from a azygous supplier, with the remainder having to beryllium sourced from astatine slightest 3 antithetic suppliers, not each from the aforesaid country.

The connection comes aft China past twelvemonth restricted exports of uncommon earths and chips, which are captious for cardinal EU industries specified arsenic greenish tech, cars and defence.

2. Targeting strategical sectors with tariffs

In its economical information strategy presented past December, the European Commission besides said it would contiguous caller tools by September 2026 to fortify the extortion of EU manufacture from unfair commercialized policies and overcapacities.

“We volition combat bony and nail for each European job, for each European company, for each unfastened sector, if we spot they are treated unfairly,” Maroš Šefčovič told Euronews.

A determination to enforce caller quotas and treble tariffs connected planetary alloy imports, dominated by Chinese overcapacities, was already agreed by EU countries and the European Parliament successful April.

Now the chemic manufacture is successful the spotlight. Chinese chemic imports person surged 81% implicit 5 years. But the EU chemic assemblage besides relies connected exports abroad, including to China, the industry’s 4th export market, which makes immoderate measurement targeting China complicated.

“As an export-oriented industry, the European chemic manufacture generates implicit 30% of its income abroad. That creates a hazard of retaliation from 3rd countries,” Philipp Sauer, commercialized adept astatine Cefic, the lobby radical of the European chemic industry, told Euronews.

3. Hitting imports with anti-dumping oregon anti-subsidy duties

The Commission tin besides enforce duties connected Chinese companies erstwhile import prices autumn beneath those astatine which they merchantability their products connected their home market. It tin besides analyse companies for receiving unfair subsidies.

However, investigations tin instrumentality up to 18 months, and cases are piling up astatine the Commission’s DG Trade, which has lone astir 140 officials to grip them.

Sauer said that betwixt 1 3rd and fractional of each ongoing investigations subordinate to the chemic sector.

4. Using the Anti-Coercion Instrument

The Anti-Coercion Instrument is simply a last-resort instrumentality — the alleged commercialized bazooka — which tin beryllium utilized successful cases of economical unit from a 3rd state and would let the EU to deed China with beardown measures specified arsenic restricting entree to licences oregon nationalist procurement successful the EU.

But its usage would necessitate the backing of a qualified bulk of subordinate states, which is not guaranteed.

Germany opposed tariffs adopted by the EU successful 2024 against Chinese electrical vehicles. Spanish Prime Minister Pedro Sánchez, who has visited China 4 times successful 3 years, besides supports person ties with Beijing, seeking to unafraid large Chinese investment.

5. Unifying subordinate states

At the aforesaid time, Brussels faces the hazard that its decoupling strategy mightiness look important absorption from nationalist governments. EU subordinate states stay divided implicit however to attack China, which could successful crook let Beijing to play capitals against each other.

Such differences are already emerging successful the accusation and communications exertion (ICT) sector, wherever the EU has projected a caller mechanics requiring the phase-out of alleged high-risk suppliers, specified arsenic Huawei and ZTE, successful strategical industries, starting with telecommunications.

The proposal, included successful the revamp of the EU Cybersecurity Act, is sparking contention among respective European governments, astir notably Spain and Germany, which person agelong worked with Chinese instrumentality present profoundly embedded successful their integer infrastructure.

This de-risking strategy has besides raised fiscal concerns, since Chinese suppliers thin to beryllium overmuch cheaper than European alternatives specified arsenic Ericsson and Nokia, partially due to the fact that they are publically subsidised by Beijing.

European telecom operators person asked the EU for fiscal compensation to regenerate their Chinese equipment, pursuing the illustration of the US “rip and replace” programme, but neither the EU nor nationalist governments look keen to enactment the wealth connected the table.

In different words, the EU's afloat decoupling from China mightiness person precocious governmental and economical costs.

Whether European countries are consenting to carnivore it remains to beryllium seen.