The European Union is weighing tariffs and other trade measures as a deficit with China exceeding $1 billion a day raises concern about job losses across European industries. European Commission top trade envoy Maroš Šefčovič was due in Beijing Thursday for two days of meetings with Chinese Commerce Minister Wang Wentao. Their aim: narrow the EU’s 360 billion euro ($410 billion) trade deficit. Earlier this year, Šefčovič gave Beijing an October deadline to produce meaningful results.
Trade measures on the table
European Parliament lawmakers voted 454 to 86 on Wednesday for a resolution calling for “economic reciprocity and a proportionate EU response if China does not open its markets.” Hilde Vautmans, the Belgian lawmaker who led the resolution, said before the vote: “Europe has economic power, it's time we used it.” The EU has already imposed trade measures on Chinese steel imports and small e-commerce parcels.
In June, the European Policy Centre in Brussels said European producers of batteries, solar panels, steel, electric vehicles, chemicals and machinery were losing jobs and capacity. It called for a trade investigative body modelled on Section 301 of the U.S. Trade Act. The proposal presents such a body as a possible response to perceived unfair trade practices and a way to protect European industries.
Possible EU responses range from tariffs to the Anti-Coercion Instrument, which the bloc calls its “trade bazooka.” The instrument has never been used. It could block or restrict trade and investment from countries found to be putting undue pressure on EU members or corporations.
France’s High Commission for Strategy and Planning called in February for swift measures, including 30% tariffs on many Chinese exports and a devaluation of the euro against China’s currency. France and Germany also proposed a broad rethink of EU policy toward China in a letter that would make it easier for the European Commission to use the Anti-Coercion Instrument. The Associated Press saw a copy of the letter.
Industrial competition and jobs
Across the 27-nation bloc, politicians and economists see Chinese subsidies and exports as a major threat to industries such as steel foundries and car factories. After the United States raised tariffs, China redirected exports to the EU and other markets. German auto sales are falling sharply in China, while Chinese automakers are positioned to gain European market share by undercutting prices with heavy state subsidies. Volkswagen and other major manufacturers have already made mass layoffs.
European Commission President Ursula von der Leyen called the trend another “China shock” for Europe, comparing it with the early 2000s in the United States, when hundreds of thousands of factory jobs in the American heartland disappeared.
Tim Rühlig, a China analyst at the European Union Institute for Security Studies, said the EU’s weak economy required domestic reform and a more aggressive foreign trade policy, particularly with China. He also said European businesses and political leaders bore some responsibility. “It's clear that just protecting yourself from China is not the future,” Rühlig said. “But to have a chance of making yourself ready for future technologies and to remain competitive in the coming 15-20 years, you have to protect yourself.”
Rühlig said complete disengagement with China, like the EU’s approach to Russia after its invasion of Ukraine, was impossible. Momentum had grown to reset trade relations, he said, asking: “Where do we make ourselves independent or at least more diverse? And where do we still work with the Chinese?”
Retaliation and competing interests
China’s exports to the EU rose 15.3% in the first eight months of the year, while imports from the EU rose 6.2%, according to China’s customs agency. European Commission data lists China as the EU’s second-largest goods trading partner after the United States.
A spokesperson for China’s Ministry of Commerce said the countries should not encourage the EU to adopt protectionist measures. The ministry said: “Protectionism cannot enhance competitiveness, and decoupling or cutting off supply chains will only harm others without benefiting oneself.” Last month, an editorial in China’s state-run Global Times said: “The EU does not have the capacity to wage a trade war against China. If it is truly determined to do so, then let it try.”
China recorded a $1.2 trillion global trade surplus in 2025. Its exports to Europe, Southeast Asia, Latin America and Africa expanded after U.S. tariffs took effect in 2025. Its export sector remained resilient despite U.S. tariffs and other restrictions, said Max Zenglein, Asia Pacific senior economist at The Conference Board.
Before the Šefčovič-Wang meeting, China opened an anti-dumping probe into EU exports of p-nitrotoluene, which is used in dyes and pharmaceuticals. Beijing had warned the previous month that it would retaliate if the EU adopted tougher protectionist trade measures. Zenglein said China had “largely stared down attempts to force a change in course.”