The European Union is seeking to persuade China to curb its exports to the bloc as Brussels aims to reduce a significant trade deficit. This marks a shift in the EU's trade policy, mirroring approaches taken by the U.S. and China in managing global trade through enforcement and strategic controls.
The shift towards enforcement and managed trade by major economic blocs like the EU, US, and China signals a move away from unfettered globalization, potentially impacting global supply chains, corporate competitiveness, and the relevance of international trade organizations like the WTO.
Global trade is undergoing a significant reshaping as major economic powers like the European Union, China, and the United States increasingly focus on enforcement and strategic controls rather than solely relying on traditional free trade principles. The EU, in particular, is exploring methods to persuade Beijing to reduce its exports to the bloc, aiming to address a substantial trade deficit. EU trade chief Maroš Šefčovič indicated that the most effective approach involves tackling the issue from both sides, suggesting a need for increased European product sales to China alongside better management of Chinese exports into the EU.
This strategic shift by the EU mirrors policies seen in the 1980s when Japan and South Korea agreed to cap shipments of certain goods to Europe and the United States. The European Commission is under pressure from member states to demonstrate concrete results by mid-October, with a focus on new tools to combat the trade imbalance, which is impacting European chemical and car manufacturers. Negotiators are currently engaged in 'very open, very tough' talks with China, with the goal of achieving 'clear deliverables' and 'pilot schemes' to manage China's supply glut.
Meanwhile, the United States has also employed protectionist measures, including raising tariffs in April 2025, and has since rebuilt these measures through alternative legal instruments after a Supreme Court setback. China, in response to U.S. tariffs, has weaponized its exports by restricting critical minerals, rare earths, magnets, and pharmaceutical components, impacting global supply chains and demonstrating the use of trade as a tool for economic coercion.