Overview
- At the Brussels summit on Thursday, Emmanuel Macron’s proposal for an EU equivalent of the US Section 301 gained visible backing from Germany, Poland, the Netherlands and Belgium.
- Eurostat data show the EU runs a trade deficit with China worth more than €1 billion a day and an OECD study found Chinese firms received far larger public support than OECD peers between 2004 and 2025.
- The European Commission is also advancing an ‘instrument of diversification’ that could require companies in key sectors to broaden supply sources for inputs like rare earths and batteries.
- Officials stress any new trade‑defence tool would target unfair practices rather than seek full decoupling and they warn Beijing could retaliate as it did after 2025 EV tariffs when it hit cognac, pork and dairy exports.
- No formal mechanism has been adopted and details remain undefined, so the next steps are negotiating legal design, deciding which sectors must diversify, and weighing the economic costs for European firms and consumers.