EU advances Industrial Acceleration Act and intensifies China trade negotiations

The European Commission is moving ahead with the Industrial Acceleration Act, a policy designed to boost the share of manufacturing in the European Union’s GDP to 20% by 2035, up from around 14% today. The legislation links access to subsidies and public contracts to production within the EU, increasing state involvement in sectors such as energy, transport and high‑tech manufacturing. Analysts note the measure could raise costs and bureaucracy, especially for small and medium‑sized enterprises, while reflecting a broader shift toward more active government support similar to policies in the United States and China.

At the same time, the EU is preparing to intensify trade talks with China over a rapidly widening trade deficit, which reached €360 billion last year, up from €312 billion the previous year. EU Trade Commissioner Maroš Šefčovič has called for stronger negotiating positions, echoing recent U.S. approaches and warning against unfair Chinese subsidies and over‑capacity. Member states remain divided, with France urging tougher actions and Germany favoring continued dialogue. The discussions are set to continue at the upcoming EU Council meeting in June and during the G7 summit in France, with potential Chinese retaliation noted as a risk.