EU Weighs New China Curbs as €304.5 Billion Trade Deficit Drives 20% Chip Goal
Updated
Updated · Jacobin magazine · Jun 14
EU Weighs New China Curbs as €304.5 Billion Trade Deficit Drives 20% Chip Goal
3 articles · Updated · Jacobin magazine · Jun 14
Summary
Brussels is pairing new industrial initiatives with possible trade restrictions on China as it pushes to cut dependence on Chinese technology and manufacturing.
€304.5 billion was the EU’s 2024 goods deficit with China, while the gap hit €98 billion in Q1 2026 alone, reinforcing pressure for export controls, investment screening and supply-chain diversification.
A new Industrial Accelerator Act prioritizes EU-made products in procurement, and the European Commission wants the bloc’s semiconductor market share doubled to 20% within four years.
Officials are also examining quotas, tariff-rate quotas and supplier-diversification rules in strategic sectors, even as China remains central to batteries, EVs, wind turbines and other advanced industries.
The shift marks a broader turn from the EU’s free-trade posture toward interventionist industrial policy, though Europe still lacks the low-cost labor, raw materials and production depth needed for full decoupling.
Without China's cheap labor or raw materials, can the EU's new industrial strategy truly succeed?
As Europe challenges China's dominance, will its citizens pay the price through more expensive green technology and electronics?
EU-China Trade at a Crossroads: Record Deficit, Escalating Barriers, and the Race for Chip Independence
Overview
The report highlights the growing trade tensions between the EU and China, driven by a significant imbalance in goods trade. In 2025, China became the EU’s largest import source, while the US remained the top export destination. Despite concerns about a surge of cheap Chinese goods, especially electric vehicles (EVs), the EU actually holds a strong and growing trade surplus in EVs, suggesting the threat may be overstated. This complex relationship is pushing the EU to adopt stronger defensive trade measures, while China warns of retaliation, making the future of EU-China trade relations uncertain and increasingly contentious.