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Spring 2026 will be remembered as a turning point in the relations between the European Union and China. On June 19, under the pressure of member states such as France, Italy, the Netherlands and even Germany, the Council urged the Commission to tackle “global macroeconomic imbalances.” In concrete terms, this amounts to endorsing a tighter trade policy toward China.
Although Europe’s stance has gradually hardened since the end of the pandemic, it now seems to be adopting a more defensive economic approach.
While the Union does not seek to sever ties with China, it is increasingly prioritizing economic security over unfettered market access. This shift is primarily explained by industrial concerns.
Chinese exports have indeed expanded rapidly, while the European manufacturing sector faces growing structural vulnerabilities. At the same time, after years of welcoming foreign direct investments from China with mixed results, European leaders are growing skeptical about the real economic benefits—questioning their ability to generate sufficient local value added, technology transfers, or jobs.
Even if public statements stop short of explicitly naming China, there is no longer any doubt that the growing trade surplus with that country is at the heart of concerns. Informal discussions on restricting China’s access to the European market have intensified, and as early as March 2023, the Commission President, Ursula von der Leyen, introduced the concept of “de-risking,” signaling a strategic shift.
Since then, this mistrust has become a defining feature of Europe’s economic policy toward China.
There is no longer any doubt that a sense of urgency is truly felt in Europe.
Faced with China’s threats to curb exports of critical minerals, the ongoing war in Ukraine led by Russia, and persistent suspicions in Europe about Beijing’s support for Moscow, EU-China relations are strained. Since Donald Trump launched his trade war in 2018, Chinese exports to the United States have partly redirected toward Europe, a market of 450 million consumers. Overall, Chinese exports have risen by more than 50% since 2019, while the EU-China trade deficit has widened from €180 billion in 2015 to €360 billion in 2025. On average, about 15% of Chinese exports are now destined for European markets. “A trade deficit of one billion euros per day is not sustainable,” warns Maroš Šefčovič, European Commissioner for Trade.
The Chinese economic model has become an increasingly worrisome source of concern as value creation risks concentrating in China, while Europe could be relegated to a role of assembly-line operator. Beijing’s dual strategy, combining massive industrial exports with possible restrictions on strategic raw materials, is seen as a direct threat to Europe’s industrial fabric.
The Union is indeed confronted with a wave of factory closures. This phenomenon affects both factories located in China and those in Europe, with disastrous consequences. In the first quarter of 2026, Volkswagen, one of Germany’s three major car manufacturers, reported a 20% drop in sales in China, its single largest market, where domestic makers like BYD are intensifying competition. The company announced it would cut 100,000 jobs, or 15% of its workforce, and would close four factories in the near future. Like other European automakers, Volkswagen is seeking to counter the rising competition from Chinese brands, particularly in the electric vehicle sector. According to Jürgen Matthes of the German Institute for Economic Research, the widening trade imbalance “erodes the core of German industry, notably in the automotive, machinery and chemical sectors.”
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