European industry urges EU action against China trade practices

A coalition of 44 European industrial associations has urged the EU to take tougher action against what they describe as “unfair Chinese trade practices”.

The associations, representing sectors such as metals, chemicals, and automotive components, stated that these practices threaten European manufacturing and could trigger further job losses.

The groups demanded that EU member states deploy existing trade defence instruments more effectively and introduce new mechanisms to redress market distortions.

The appeal comes as the EU grapples with a goods trade deficit with China exceeding €1 billion per day. In this context, EU Trade Commissioner Maroš Šefčovič travelled to Beijing to hold talks with his Chinese counterpart.

European leaders are scheduled to debate the bloc’s response at a summit in Brussels next Thursday.

The outcome of the discussions in Beijing appears poised to shape that debate substantially.

In their appeal, the industrial groups urged the European Commission to examine entire value chains when reviewing trade complaints and to recruit additional staff to resolve cases more swiftly.

They also called for new tools to counter state-driven market distortions, whilst warning against measures that could adversely affect close European partners such as the UK, Norway, and Switzerland.

EU Trade Commissioner in Beijing

The purpose of Maroš Šefčovič’s two-day visit to Beijing is to secure concessions from China to help reduce the trade imbalance.

Discussions with Chinese Commerce Minister Wang Wentao focused on vehicle exports that are growing increasingly prevalent across the European market, particularly plug-in hybrid cars.

According to a Politico report published on Thursday, one in eight cars purchased in the EU in August was of Chinese origin, a trend driven primarily by a surge in plug-in hybrid sales.

The EU introduced additional countervailing tariffs on Chinese-origin battery electric vehicles in 2024, but plug-in hybrids were excluded from the scope of those measures.

European negotiators aim to restrict China’s exports in this sector in some manner.

According to Politico’s reporting, if meaningful commitments fail to emerge from the negotiations, the European Commission is considering the imposition of unilateral trade restrictions on cars, including import quotas and tariffs, to protect European carmakers.

The EU is also preparing protective measures for other industrial sectors. European Industrial Commissioner Stéphane Séjourné said the Commission plans to introduce targeted safeguards for plastics and composite materials, depending on demand from EU governments.

Germany urges UK to raise tariffs

According to a source close to Berlin’s stance who spoke to Politico, Germany wants the UK to raise tariffs on Chinese-origin electric vehicles in exchange for an exemption from “Made in Europe” rules.

The source stated that the government of Friedrich Merz believes this move would reflect reciprocity in trade and serve as an answer to accusations from other EU member states that Britain is attempting to “cherry-pick” the benefits of EU membership.

The development follows Prime Minister Andy Burnham’s meeting with the German Chancellor during his first official visit to Germany this week.

Burnham and Merz were set to discuss the prospects of Britain’s future relationship with the EU, as the British prime minister has returned the issue of rejoining the bloc to the UK political agenda for the first time in a decade.

Berlin’s position on electric vehicle tariffs is significant because Germany, unlike countries such as France that have adopted tougher stances, had generally pursued an accommodating policy towards the UK on trade issues since Brexit.

In response to the trade practices of rivals such as China and the US, the EU is preparing new “Made in Europe” rules designed to favour European manufacturers over producers outside the bloc.

The UK fears these measures could harm British business, particularly car manufacturers, and is seeking assurances from Brussels that it will be exempted from the application of these rules.

If Berlin has its way, these assurances could be contingent upon adopting EU trade policy regarding Chinese-origin electric vehicles.