EU Moves Toward Tougher Measures on China Trade Deficit

European Union leaders gathered in Brussels to address a rapidly widening goods trade deficit with China, which reached roughly €360 billion in 2025 – about €1 billion a day. The bloc’s reliance on China for critical minerals such as rare earths and for low‑cost electric vehicles has intensified calls for stronger trade‑defence tools.

Member states are split on the depth of action: France and a coalition of Italy, the Netherlands, Lithuania and Poland advocate new duties, quotas or a “Section 301‑style” instrument to curb unfair Chinese practices, while Germany – the EU’s biggest exporter – and Spain urge caution to avoid retaliation that could hurt their own industries.

The European Commission has already launched anti‑dumping and anti‑subsidy investigations, 18 of 21 new cases targeting Chinese producers, and imposed additional duties on Chinese electric vehicles. China has responded with counter‑measures on EU dairy, brandy and other products.

Discussion also covered diversification of supply chains, especially for rare earths, and proposals that sensitive sectors source inputs from at least three suppliers. German Chancellor Friedrich Merz highlighted that Germany alone accounts for about €90 billion of the deficit, underscoring the political pressure to rebalance trade without triggering a full‑scale trade war.