EU moves to de‑risk trade with China amid rising deficit

The European Union is intensifying a "de‑risking" policy to curb dependence on Chinese imports and protect its industrial base. Officials cite a widening trade deficit – €359 billion in goods in 2025, with Chinese exports of about €560 billion versus EU exports of just under €200 billion – and the risk that state‑subsidised Chinese products could undercut European manufacturers in sectors such as renewable energy, automotive, aerospace and telecoms.

The EU is evaluating new commercial restrictions on China, aware that Beijing could retaliate. The strategy aims to diversify supply chains for critical minerals and components, encourage domestic capacity, and ensure a level playing field without fully decoupling from the Chinese market. Chinese authorities warn that such measures would raise costs for European consumers and firms, while the OECD likens Chinese subsidies to "doping" that unfairly benefits less productive actors.