The European Union, which last year seemed to be aligning closely with China in response to the U.S. tariff policy under Donald Trump, has moved to reduce its dependence on China. The shift comes amid growing concern that Europe's industrial base could be shaken as reliance on China rises not only for finished goods but also for key components.
According to major foreign media, the European Commission will hold a China strategy meeting on the 29th (local time) to discuss using its network of more than 70 countries with free trade agreements (FTAs) to build new supply chains. The strategy is to reorganize supply chains for critical raw materials and intermediate goods around friendly countries and gradually lower dependence on China.
Earlier, the Financial Times (FT) in Britain also reported on the 18th that the European Commission is reviewing new regulations to limit reliance on specific countries and specific suppliers for some key industries such as chemicals and industrial machinery. Aimed effectively at China, the EU is pushing to cap the share of raw materials and parts that can be sourced from a single supplier at around 30%–40% and to require securing at least three suppliers.
In Europe recently, concern has been growing that domestic markets could be swallowed by China. As the Chinese government leverages massive subsidies to gain price competitiveness, the share of Chinese-made products in European markets has been rising rapidly.
There are already plenty of industries overly dependent on Chinese products and inputs. For example, in the case of amino acids, widely used as flavor enhancers and in pharmaceuticals, 52% of the European Union's import volume comes from China. Soapbox, a China trade monitoring website, analyzed that for "polyols," used in plastics, cosmetics, paint, and antifreeze, about 96% of the European Union's imports are from China.
Jens Eskelund, head of the European Union Chamber of Commerce in China in Beijing and a China expert, said, "People think of finished goods like electric vehicles when they hear Chinese imports, but the real issue is the massive volume of components imported from China," adding, "Europe is becoming more dependent on China."
Oliver Lückeberg, head of foreign trade at the German Mechanical Engineering Industry Association (VDMA), a trade group for Europe's and Germany's machinery and equipment manufacturers, said, "If you are deciding what to produce and a Chinese supplier offers 95% of the quality of a European product at 30%–50% lower prices, for corporations it is inevitably a rational choice," adding, "This very situation is also hurting European industry. In the past year alone, 22,000 jobs disappeared in Germany's machinery sector."
Amid this trend, China's trade surplus with the European Union has been growing rapidly. The Guardian in Britain, citing Chinese customs data, reported that imports from China, the world's second-largest economy, to Germany, Europe's largest economy, reached $118 billion, while Germany's exports to China fell to $93 billion. As a result, China's trade surplus with Germany more than doubled from $12 billion in 2024 to $25 billion in 2025.
The EU's policy of distancing from China has gathered pace this year. The Industrial Acceleration Act (IAA), released in March, requires "manufacturing in Europe" as a condition for public procurement and subsidies in four strategic industries—batteries, electric vehicles, solar, and critical raw materials. The move is being seen as a de facto check targeting Chinese industry. In January, it also passed amendments to the cybersecurity law that designate Chinese corporations such as Huawei and ZTE as "high-risk suppliers" and allow their phased exclusion from national telecom networks in Europe.
As the EU begins to reduce its dependence on China, concerns are emerging that trade tensions between the two sides could intensify in earnest. According to the South China Morning Post (SCMP) in Hong Kong, at a forum in Beijing last week titled "EU-China trade relations: Partnership or a sinking ship?", European and Chinese diplomats, officials, and experts clashed fiercely over deepening trade frictions. The Chinese side criticized the European Union's trade policy as a "protectionist attempt" for decoupling from China, saying the EU is "bullying" it.
SCMP said, "These scenes sharply contradict interpretations that the string of visits by European leaders to China earlier this year signaled a 'pivot to China,'" adding, "With Europe's aggressive industrial policy gathering speed and China expanding the prospect of retaliation, the clashes in Beijing could be a harbinger of greater trade conflict."