Overview
- EU leaders, meeting in Brussels on June 18, asked the Commission for faster, sector-level tools after months of concern about a widening goods deficit with China of about €360 billion in 2025.
- Brussels is preparing an ‘overcapacity’ instrument to counter state‑supported mass exports along with quicker safeguards and wider use of the Foreign Subsidies Regulation to target unfair competition.
- Experts and officials point to OECD estimates that Chinese firms received roughly three to eight times more government support than OECD peers between 2005 and 2024 as a driver of excess supply that floods world markets.
- U.S. tariffs have cut Chinese shipments to America by about 37% in early 2026 while exports to the EU rose roughly 16.4%, a pattern officials say risks redirecting Chinese goods toward Europe and worsening pressure on jobs and factories.
- Member states remain split over how far to go with France urging aggressive measures and Germany shifting cautiously toward calibrated tools, with leaders warning that any action must weigh the risk of Chinese retaliation and the need to protect vital supply chains.