EU Commission Plans New Measures to Counter Chinese Trade Practices

The European Commission is preparing new proposals to tighten trade restrictions on China, specifically targeting state-subsidized firms that create market distortions through overcapacity in strategic sectors. These measures, including a new instrument to address unfair competition, are scheduled for discussion among commissioners on May 29 before being presented to European leaders. The initiative aims to protect EU industries, such as wind turbine and electric vehicle manufacturing, from being undercut by cheap Chinese imports. Key upcoming milestones include the G7 summit in France on June 15, where leaders will discuss China's export curbs on critical raw materials, and the European Council meeting in Brussels on June 18. While political appetite for tougher stance is growing due to geoeconomic pressures, the plan faces challenges regarding World Trade Organization compliance and requires the support of Germany. Berlin remains cautious about escalating trade tensions with Beijing, given its industrial exposure to Chinese supply chains, particularly in clean technology and automotive sectors. The Commission seeks to balance strategic autonomy with diplomatic relations, addressing global macroeconomic imbalances while navigating internal member state reservations.