Trade tensions between the EU and China are escalating as European policymakers raise concerns that Chinese industrial overcapacity is placing increasing pressure on key European sectors.
The debate initially centered on electric vehicles (EVs), where the EU imposed tariffs on Chinese-made EVs over concerns that state subsidies were creating unfair competition. However, the issue has since broadened beyond the automotive sector, with European officials warning that similar pressures are emerging across a growing range of industries.
European People's Party leader Manfred Weber recently warned that the EU must act before China "cripples" European industries, reflecting a wider concern in Brussels that low-cost imports could undermine domestic manufacturing capacity.
At the heart of the dispute is China's export-driven growth model. As domestic demand remains relatively weak, Chinese manufacturers have increasingly looked overseas, boosting exports in sectors ranging from electric vehicles and batteries to industrial components and clean technologies. Chinese exports rose 19.4 percent year-on-year in May, supported by strong demand for autos and technology products.
European officials fear this could create what some are calling a new "China shock": a surge of imports that weakens local industries and increases dependence on Chinese supply chains.
"The tone is basically panic," said Jeromin Zettelmeyer, director of Bruegel, an economic think tank in Brussels. "There's a sense of imminent collapse of industry, of imminent danger."
This creates a challenge in balancing economic protection with continued engagement. China remains one of the EU's largest trading partners, and many European businesses remain heavily invested in the Chinese market.
The disagreement over EVs has increasingly become a wider debate about industrial policy, supply chain resilience and economic security. As both sides seek to protect strategic industries while maintaining commercial ties, EU-China trade relations is a growing trade policy concern in the coming years.