Major European Union member countries like Spain, Italy, the Netherlands, France, and Lithuania are collaborating to shield their economies from the influx of inexpensive products from nations with excessive industrial capacity, notably China. A recent report highlighted that these countries are advocating for more robust actions to tackle the issue of “systemic and structural industrial overcapacity,” often associated with China. This move comes ahead of a significant China-focused discussion in Brussels.
The European Commission is gearing up for a crucial China policy orientation debate following mounting concerns from governments and industries regarding the economic challenges posed by Chinese competition. A confidential document, as reported by the Financial Times and the South China Morning Post, proposes a more assertive utilization of EU safeguard measures to address broad disruptions across sectors, rather than handling issues on a product-by-product basis.
These safeguard measures enable the imposition of tariffs or quotas in cases where sudden import surges are deemed detrimental to local industries. Historically underutilized, these measures have been deployed to counter spikes in Chinese steel and ferroalloys imports, crucial for the steel sector. The document also suggests the potential adoption of a new “resilience tool” to be activated when European supply sources exceed specified limits.
The combined impact of US tariffs and China’s alleged unfair trade practices has directly impacted the European industry, resulting in the loss of approximately 1 million jobs between 2019 and 2025. Additionally, a recent report from the Centre for European Reform indicated that over 400,000 German jobs linked to exports to China might have already been displaced. Notably, there are calls for a European equivalent of the US “Section 301 tool,” a tariff mechanism frequently used against China by former President Donald Trump, indicating broader support for a policy shift towards China.
