Brussels Presses China On Trade Gap

The European Commission has put China on notice: by October, it wants "tangible results" on a trade imbalance that Spanish reporting puts at roughly €360 billion a year (eldiario.es, La Vanguardia). German coverage has translated that into a more arresting figure: about €1 billion a day flowing towards China (Euronews).

The image works politically, but it can mislead. A trade deficit is the gap between what Europe buys from China and what it sells back. It is not a daily cash transfer vanishing from the European economy. Still, the pressure behind the number is real. The problem for Brussels is more awkward: its trade-defence system was built to investigate unfairness product by product, while China’s industrial policy works across whole supply chains.

Case-by-case law versus supply-chain competition

Trade Commissioner Maroš Šefčovič’s October deadline has the sound of a line being drawn. EU law is slower and narrower than that. Anti-dumping duties, which are taxes on imports sold into the EU below their home-market price, require the Commission to prove that dumping is happening, that EU producers are being harmed, and that the two are directly connected (European Commission, EU Regulation 2016/1036).

Anti-subsidy cases follow much the same logic. Brussels must identify a specific state support measure and trace the damage it causes (WTO SCM Agreement). Each investigation typically takes about fourteen months. "Chinese overcapacity" may describe the economic reality, but it is not, by itself, a legal finding.

The machine is already moving. Chinese tyre makers have increased their European market share from about 18% in 2021 to more than 30% in 2025, and proposed duties could reach 45.3% for some producers (Le Figaro). Electric vehicle tariffs have shown that the Commission is prepared to act. But each case shields one part of European industry while raising costs elsewhere: for importers, for factories using those inputs, and sometimes for consumers.

Four capitals, four risk calculations

This is not a clean story of Europe lining up against China. Every capital is doing its own calculation.

Germany is moving towards a tougher EU stance, but not with much comfort. More than 100,000 job cuts have been announced in its car industry, according to Euronews. Research from Kiel suggests, however, that only about a third of Germany’s world-market losses are due to Chinese competition, with the rest explained by high energy costs and domestic weaknesses (FAZ).

That matters legally and politically. China’s share of Germany’s gallium imports, a metal used in chips and LEDs, rose from 28.9% in 2023 to 47.4% in 2025 (Merkur). If Beijing restricts gallium exports, German chip and electronics companies feel the squeeze quickly. Berlin wants targeted instruments and more diversified supply, not a tariff spiral (Spiegel).

France is one of the EU’s more hawkish voices on Chinese trade. It has pointed out that Chinese plug-in hybrids currently sit outside EV-specific tariffs, leaving an opening for redirected sales (Le Figaro). Spain supports closer monitoring, but worries about retaliation against pork, wine and spirits exports (Vinetur). The Netherlands has tightened controls on chipmaking-equipment exports to China while lobbying Washington against further curbs that could damage ASML, its most important technology company (Reuters).

For Ireland, the lesson is familiar from other EU trade fights: the member states most eager for protection are not always those most exposed to retaliation. Once Beijing starts choosing targets, the costs rarely fall neatly on the sectors Brussels meant to defend.

The causality test Brussels cannot skip

The legal choke point is causality. WTO rules say injury cannot be attributed to dumped imports when other factors explain it (WTO Anti-Dumping Agreement). If Germany’s industrial weakness is partly the product of energy costs and underinvestment, the Commission cannot simply load the whole case onto Chinese pricing.

That distinction, between unfair foreign competition and domestic failure, will decide how many cases Brussels can actually win. It will also decide how far EU governments are prepared to follow the Commission once the retaliation risk becomes concrete.

Until October, the deadline gives Brussels some leverage. After that, the harder question returns: can product-by-product legal files add up to a response equal to the scale of China’s supply-chain strategy? And, as ever in EU trade policy, who pays first: the workers protected by new duties, the factories absorbing higher input costs, or the Spanish pork farmers and German auto suppliers caught in the reply from Beijing?