Key facts
- The EU's trade deficit in goods with China reached €360 billion last year.
- The deficit is continuing to expand.
- EU member states are converging on the need for a tough new trade strategy.
- Potential new trade instruments are being considered, possibly modelled on US Section 301 tariffs.
- The strategy aims to prevent Chinese-driven deindustrialisation in Europe.
The trade imbalance between the European Union and China in goods has reached a significant €360 billion over the past year and shows signs of further expansion. In response, Brussels is signaling a desire to adopt a more assertive policy toward Beijing. EU countries, from free marketeers to interventionists, are converging on the need for urgent action to prevent Chinese-driven deindustrialisation ahead of a key summit. A broad coalition of members now support the development of a tough new trade strategy that could involve multiple new instruments and a more rapid-fire, strategic use of existing weapons. One of the tools could be modelled on US President Donald Trump’s Section 301 tariff measures, a concept first floated by French President Emmanuel Macron. While concerns remain over compatibility with global trading rules, other member states have expressed interest in such protective instruments, alongside diversification tools. The diplomat noted that while China is a problem, it would be preferable if the tool was country-neutral, linking overcapacity to subsidies and defending against unfair practices.