Europe is grappling with a renewed challenge from China that could potentially undermine local manufacturing industries and lead to job losses, according to trade experts. The situation mirrors the “China shock” the United States faced 25 years ago, which resulted in significant job displacement due to the inflow of Chinese imports. Jens Eskelund, president of the European Chamber of Commerce in Beijing, highlighted that the issue lies not just with finished goods like electric vehicles but with the vast volume of components being imported from China, making Europe increasingly reliant on these imports.
The European Union is facing critical decisions as Chinese components become more integral to its industrial framework. The bloc is reportedly contemplating measures to compel European companies to source crucial parts from a minimum of three different suppliers. European commissioners are set to convene on May 29 for urgent discussions on potential actions. Oliver Richtberg from VDMA, representing the machinery and equipment manufacturing sector, praised Brussels for its proactive engagement, contrasting it with Berlin’s approach. He pointed out that state subsidies and currency fluctuations have made Chinese goods significantly cheaper, posing a challenge to European industries.
Data from trade analyses suggest a worrying trend of European industries being overshadowed by Chinese imports. For instance, the EU imports a staggering 88% of amino acids by volume from China, and 96% of polyhydric alcohols used in various products. A trade consultant warned of the economic risks posed by this dependency, which could make EU production unsustainable. As China’s trade surplus with the EU continues to grow, concerns are rising about the effectiveness of current measures like the 2024 EU tariffs, which have been undermined by currency exchanges.
Germany, now China’s largest trading partner, has seen its trade deficit with China double, resulting in a significant loss of industrial jobs. The car manufacturing sector alone experienced a loss of 51,000 jobs between 2024 and 2025. Jens Eskelund expressed existential concerns over the increasing reliance on China, noting a trend of European companies expanding their presence in China. He warned that this could escalate from an economic to a security issue for Germany if the trend continues.
The EU has proposed legislative initiatives like the Industrial Accelerator Act and updates to the Cyber Security Act, aimed at safeguarding its industries from Chinese dominance. However, these measures won’t take effect until 2027, leaving the EU in need of immediate solutions. Andrew Small from the European Council on Foreign Relations emphasized that the current tools are insufficient to address the import levels. He noted that while tariffs were initially pursued to balance trade, they have proven inadequate, and there’s little appetite among politicians to revisit them. Meanwhile, China continues to leverage its position, potentially complicating European efforts to implement countermeasures.