The European Commission warned on Friday that its trade and investment relationship with China is unsustainable and requires a more robust response, after commissioners met to discuss ways to shield European industries from surging Chinese imports.
“The Commission’s overarching approach remains de-risking, not decoupling. China is a critical partner, and engagement and dialogue will continue while communication channels remain open,” the Commission said in a statement following the meeting. “At the same time the current state of the trade and investment relationship is not sustainable. As economic and security interests become ever more intertwined, both dimensions will require a more robust and coherent response,” it added.
The EU executive is pitching ideas ahead of an EU leaders’ summit on June 18-19. Possible measures include forcing EU companies to diversify their supply chains and creating new trade tools to curb China’s access in chemicals, metals and clean technology. The bloc is also pursuing alternative supplies of critical minerals through partnerships with resource-rich countries from Central Asia to Australia and Brazil, under its RESourceEU initiative.
Industry Commissioner Stéphane Séjourné said this week he wants the bloc’s existing trade tools — including import duties and quotas — deployed “more systematically” across sectors rather than targeting specific companies or materials.
The EU’s efforts to curb Chinese imports have produced mixed results. The bloc imposed tariffs on heavily subsidised Chinese electric vehicles but not on hybrids, which accounted for nearly 40% of new car registrations so far this year. China’s market share in Europe continues to rise.
The G7 is also set to tackle trade imbalances and overcapacity at a mid-June summit, as China tightens its grip on rare earths and other metals critical to the defence, technology, energy and automotive sectors. The EU’s push to reduce dependence on China mirrors a broader Western effort to reverse offshoring that peaked in the early 2000s and hollowed out industrial capacity across Europe and the United States.
China’s Foreign Ministry accused the EU of using trade data selectively to justify claims of imbalances and has repeatedly threatened strong countermeasures should Brussels press ahead with its “Buy European” policy. China rejects the notion that its trade practices are unjust.