EU moves to curb China trade dominance with new industrial rules

EU‑China trade tensions Industrial Accelerator Act Made in EU rare earth metals trade deficit

The European Commission says the current trade relationship with China is "not sustainable" and plans a package of measures to reduce dependence on Chinese imports. The draft Industrial Accelerator Act would require companies receiving EU subsidies or public contracts to source at least three suppliers and to meet "Made in EU" criteria, especially in sectors such as chemicals, clean energy, batteries, solar panels and electric vehicles.

EU officials warn of a second "China shock" that could threaten 29 million jobs and widen the EU‑China trade deficit, which reached €360 billion in 2025. They cite concerns over dumping, subsidies and restricted exports of rare earth metals, which "are used for everything from electronics to weapons and radars," said China correspondent Roland Smid.

China has called the proposals discriminatory and threatened retaliation. The EU aims to present the new measures by September and to strengthen strategic industries while limiting the influence of Chinese ownership in key companies, a concern also raised in the United States where Chinese stakes in automakers such as Mercedes are prompting new export‑control legislation.