EU gets tough on China as trade imbalance stokes deindustrialisation fears
Talks between EU trade commissioner and Chinese commerce minister come as bloc seeks to limit influx of Chinese imports. As European Union trade commissioner Maros
Talks between EU trade commissioner and Chinese commerce minister come as bloc seeks to limit influx of Chinese imports. As European Union trade commissioner Maros Sefcovic hosted Chinese Commerce Minister Wang Wentao in Brussels for talks on Monday, the Slovak diplomat was all smiles. But behind the diplomatic niceties, Sefcovic’s message to China rang out loud and clear. Addressing the media after a marathon day of negotiations with Wang, Sefcovic may not have literally said “enough is enough,” but he hardly needed to. “China’s exports to the EU keep rising, while our market share in China keeps shrinking,” Sefcovic said. “This trend is not sustainable. The status quo is not an option.” For a long time, Europe was seen as the Transatlantic counterargument to United States President Donald Trump’s protectionism, defending free commerce and trade against a rising populist tide. That now feels like a distant memory. Chinese firms’ rapidly growing footprint in Europe, facilitated by China’s huge subsidisation of industry and huge economies of scale, has rattled European firms and shaken the bloc’s leaders into action. In a speech to the G7 last year, European Commission President Ursula von der Leyen dubbed Chinese industry’s growing dominance overseas a “new China shock”. While there is a variety of views among EU member states about how far the bloc should go to push back against the wave of Chinese goods flooding into the market, there is broad alignment on the need to take action to safeguard domestic industry.
“The mood has shifted because there is real danger for European companies and everyone is starting to realise it,” Philippe Le Corre, a professor of international relations and Asian studies at ESSEC Business School in Cergy, France, told Al Jazeera. “This is the new normal,” Le Corre added. “There is no reason the Europeans should be sitting on the side, waiting for the Americans and the Chinese to find a compromise on big issues. The EU needs its own policies including vis-a-vis China.” China’s trade surplus with the EU hit 360.6 billion euros ($411bn) in 2025 – the equivalent of 1 billion euros a day and up 15 percent from the previous year. Chinese firms now dominate Europe’s supply of goods in a host of critical sectors, including solar panels, rare earths, chemicals, and industrial robots. Meanwhile, Chinese companies are increasingly challenging some of Europe’s most prized legacy companies on their home turf, particularly car makers. EU tariffs of up to 35.3 percent on Chinese electric vehicles have done little to slow the advance of popular brands such as BYD, Geely and Chery. In May, Chinese models surpassed 10 percent of total auto sales in the bloc for the first time, according to Dataforce. The fallout for many of Europe’s top car brands, some of the most enduring symbols of European industrial innovation and design, has been devastating. Last week, German media reported that Volkswagen was preparing to cut as many as 100,000 jobs – about 15 percent of its workforce – in what would be the biggest restructuring in the history of the global automative industry.
