EU-China Trade Tensions Rise As 44 Industry Groups Warn Of Job Losses

Forty-four European industry associations have urged the European Union to take tougher action against alleged unfair Chinese trade practices, warning of manufacturing losses and job cuts, even as Brussels and Beijing reached a preliminary trade understanding to ease tensions on October 9.

The associations, representing sectors including metals, chemicals, machinery and automotive parts, want the European Commission to strengthen trade defence measures, investigate entire value chains and recruit more staff to process complaints faster. They have also called for new tools to address state-driven market distortions while avoiding unintended harm to partners such as Britain, Norway and Switzerland.

The appeal comes as the EU's goods trade deficit with China exceeds 1 billion euros ($1.12 billion) a day, reaching approximately 360 billion euros in 2025. European manufacturers fear that subsidised Chinese goods and low-priced imports could undermine domestic production and divert investment away from the bloc.

France and Germany have backed stronger trade defences, urging the Commission to restrict access to the EU's single market when necessary to address competition distortions. European policymakers have also expressed concern that higher US tariffs could redirect more Chinese exports towards Europe, intensifying competition for domestic manufacturers.

Chinese vehicle imports have become a central point of contention. Plug-in hybrid imports into the EU rose 86 per cent year-on-year in the 12 months to September, with prices falling 20 per cent. The EU imposed additional duties on Chinese-made battery-electric vehicles in 2024, but plug-in hybrids were excluded from those measures.

Following two days of talks in Beijing, European Trade Commissioner Maros Sefcovic announced a preliminary understanding that could cut Chinese hybrid and plug-in hybrid exports to the EU by more than half over four years. The arrangement also covers improved Chinese market access for European goods worth nearly 4 billion euros and easier licensing for rare earths and permanent magnets, which are critical to European manufacturing.

However, implementation details remain unclear, and the agreement is only an initial step. Both sides will continue discussions on tariffs, market access and trade safeguards, with further talks planned for January and March 2027.

EU leaders are expected to assess the outcome at their upcoming Brussels summit. European industry groups continue to press for stronger protections, arguing that sustained action is needed to safeguard the bloc's industrial base and jobs.