EU warns of Chinese industrial overcapacity and cheap exports

European Union institutions and business groups are increasingly alarmed by large‑scale overcapacity in several Chinese industrial sectors, which they say is leading to low‑priced exports that threaten EU manufacturers. On 29 June, EU Trade Commissioner Maroš Šefčovič met Chinese Commerce Minister Wang Wentao in Brussels for the first EU‑China Trade and Investment Consultation. The two ministers agreed on four workstreams – trade and investment balancing, export controls, intellectual‑property rights and WTO reform – and pledged to reconvene at ministerial level in autumn 2026. They noted that “both sides took note of the positive results to date of the EU‑China Export Control Dialogue regarding rare earth elements and other critical materials and minerals and intend to strengthen dialogue in this field,” and stressed the need for continued information exchange on regulatory frameworks.

The European manufacturing association Aegis Europe, representing metals, ceramics and transport firms, has called for faster and more effective trade‑defence procedures, additional staff for the European Commission’s DG Trade, and a new EU safeguard instrument to address overcapacity disruptions. Aegis also urged reform of the qualified‑majority voting rule that it says hinders swift action, suggesting a simple‑majority vote for Commission proposals. The EU introduced a similar safeguard for the steel sector in 2025 and is now seeking broader tools to protect its industrial value chains.