BRUSSELS — Tensions between the European Union and China intensified Friday as the European Commission convened most of its commissioners for a strategic debate on trade policy. The Commission said in a readout that while China remains a partner, the current state of trade and investment relations is not sustainable.
This assessment follows steadily deteriorating relations since European Commission President Ursula von der Leyen labeled Beijing a "systemic rival" in a 2023 address. The EU registered a record €359.9 billion trade deficit with China last year, fueling calls within Brussels to protect the bloc's market from cheap Chinese imports. Sectors like metals, chemicals and carmaking face significant pressure.
An EU official told Euronews that recent weeks have seen a "panic attack" regarding China, noting the issue had been "overlooked for too long." European industry has shed 200,000 jobs since 2024, particularly in energy-intensive and automotive sectors, with an additional 600,000 job losses projected in carmaking this decade.
The Commission's readout specified that its "overarching approach remains de-risking, not decoupling," indicating the bloc aims to reduce dependence on China through targeted efforts rather than severing economic ties. However, the prospect of a full-scale trade war has become more tangible.
During the previous legislative term, the EU enacted measures that angered Beijing, including legislation to screen foreign direct investment. The Commission has escalated its fight against dumping—a practice where public subsidies allow Chinese exporters to sell goods below market prices—and imposed duties on battery electric vehicle imports. Several product-specific investigations are underway.
Earlier this week, the Commission fined Chinese e-commerce giant Temu €200 million for selling unsafe products and launched a full investigation into JD.com's acquisition of the e-commerce retailer MediaMarkt.
EU lawmakers and governments are discussing the Industrial Accelerator Act, a proposed law that would impose strict conditions on investments in critical sectors including batteries, electric vehicles, solar panels and critical raw materials.
Spain has emerged as reluctant to support stronger EU action against China. Due to relatively cheap energy costs, Spain has become an attractive destination for foreign investors, with Beijing accounting for a growing share. Madrid is reversing its position on a French-led initiative designed to boost trade defenses against China, according to sources familiar with the matter.
China's government is pressuring Spain to help thwart European Union proposals aimed at enhancing the competitiveness of bloc companies, these sources said.
