From the European Council of June 18 – that is, the summit between the heads of state and government of the Union member countries – a strong response against China’s trade policies was expected: in 2025, the Chinese surplus in goods trade with Europe actually exceeded 360 billion euros, marking a 15 percent annual increase; moreover, in the first four months of 2026, this surplus grew further by 10 percent.
The trade problem with China stems from the fact that the country subsidizes its industrial production. European companies, however, operate in a different context and, consequently, cannot withstand competition with these large volumes of high value-added products – such as vehicles and “clean technologies,” for example – sold at competitive prices.
THE PPE’S ANTI-CHINA DECLARATION…
Before the start of the June 18 summit, the European People’s Party – the largest group in the European Parliament, to which the Commission President Ursula von der Leyen also belongs – had announced that it would no longer “accept China’s unfair market interventions” and therefore called on the Commission to strengthen the “existing trade defense instruments.”
The declaration also urged Brussels to “stop being naive about China’s long-term ambitions” and was signed, in addition to von der Leyen, by German Chancellor Friedrich Merz: a significant fact, since Germany is both the largest economy in the Union and the country among the twenty-seven that trades the most with China. In the past, Berlin defended trade with Beijing and pursued a policy of engagement – that is, involvement – with the Asian giant. Merz has distanced himself from this line, but only partially.
… AND THE EUROPEAN COUNCIL’S SOFTNESS, BETWEEN MERZ AND SANCHEZ
In recent days, Germany – along with Italy, France, and the Netherlands – proposed the introduction of new European trade instruments to raise tariffs on China and set maximum import quotas. Among the requests was also the establishment of an obligation for companies to seek alternative suppliers of critical components – such as certain types of minerals or microchips –, in order to protect the Union’s economy from Chinese export restrictions.
However, during the European Council, Chancellor Merz did not mention China: he limited himself to a generic call to address “the global competitive context and geo-economic imbalances.” Yet the influx of low-priced Chinese goods is a problem even for Germany itself: the German industry, particularly the automotive sector, had focused on the vast Chinese market, but today exports to Beijing are sharply declining.
The most openly pro-China leader is Spanish Prime Minister Pedro Sanchez, whose country has attracted numerous Chinese investments (especially in the automotive sector): according to him, China is a “potential ally” and “Europe needs friends” at a time of great geopolitical turbulence and partial questioning of relations with the United States.
SO, WHAT WILL THE COMMISSION DO AGAINST CHINA?
According to sources from the Financial Times, the heads of the Union countries have instructed the Commission to “continue to maintain a constructive dialogue with our main economic partners,” emphasizing that “the dialogue must lead to concrete results.” Secondly, the Commission should “develop and possibly integrate instruments in the field of trade defense and industrial policy.”
An anonymous European diplomat vented to the newspaper saying that “last November we were talking about how intolerable the situation with China was and how we had to intervene. And here we are again [in June, editor’s note], talking about the same thing.”
Despite the European Union adopting a tougher rhetoric against China – which was already defined in 2019 as an economic competitor and systemic rival – it has so far achieved little in practice. Member countries fear trade retaliation from Beijing, which could raise tariffs on some sensitive products or limit exports of critical components and materials.
DE-RISKING YES, BUT HOW?
“Although awareness is growing among the twenty-seven Member States of the danger posed to European industry by Beijing’s economic and trade practices, the fear of retaliation is still very strong,” reads the European Morning Brief. “Everyone agrees that the goal is de-risking from China and not decoupling [mitigating dependence rather than total detachment, editor’s note], even though the strategy launched by von der Leyen in 2023 has not produced results.”
In recent days, Trade Commissioner Maros Sefcovic said that the Union needs a law to achieve diversification of companies away from China: diversification which, however, in practice is extremely complicated and would require considerable time.
