The European Union (EU) is moving to strengthen trade measures that would allow for rapid restrictions on market access for foreign companies, including a 'kill switch' aimed primarily at China. The EU is also considering implementing import quotas or tariffs on industries such as chemicals and machinery, where there are concerns about a surge in Chinese imports.
According to the South China Morning Post (SCMP) and Bloomberg, EU leaders requested the European Commission to develop these new trade measures during a summit held in Brussels on October 15-16. Bloomberg reported that the Commission is expected to prepare related proposals by the end of the year.
The 'kill switch' proposed by France and Germany would enable the EU to quickly restrict market access if unfair trade practices or economic coercion from specific countries severely distort the market. SCMP noted that there is broad support among EU member states for implementing such measures.
Discussions have also included the possibility of completely blocking market access. According to Bloomberg, Lithuanian President Gitanas Nausėda stated, "If China engages in specific unfair trade practices, we can limit the entry of Chinese products into the European market, and we may consider completely closing the market." He added, "This would be an extreme measure and a powerful tool."
Additionally, the EU is reviewing the application of safeguards—emergency import restrictions—on other industries, such as machinery and chemicals, where a surge in Chinese imports is a concern. Safeguards are measures that protect industries at risk from a sudden increase in imports through quotas or tariffs.
The EU is already analyzing import trends in the chemicals, pharmaceuticals, and machinery sectors through its monitoring system. SCMP reported that the EU plans to initiate safeguard investigations for these industries in the coming weeks.
Previously, the EU and China agreed to limit the annual import of Chinese hybrid cars to 350,000 units starting in 2027. The EU is expected to reference this agreement when considering import restrictions in other industries. However, finding a balance between setting low import limits to protect domestic companies and avoiding provoking retaliation from China remains a challenge.
Moreover, the EU is pursuing new trade measures to encourage or mandate European companies to diversify their supply sources and to support businesses affected by Chinese retaliation through a 'solidarity mechanism.'
SCMP reported that EU member states have expressed support for a two-track strategy that continues dialogue with China while strengthening measures to protect European industries.
The backdrop for the EU's intensified trade response toward China includes concerns over the growing market share of Chinese companies and the increase in imports of Chinese goods. According to China's General Administration of Customs, the EU's trade deficit with China reached $34.8 billion in September. In the same month, China's total exports increased by 36% compared to the previous year. China's annual trade surplus is expected to exceed last year's record high of $1.2 trillion.
However, the recent agreement on hybrid car import limits has raised the possibility of renewed trade tensions as the EU begins serious discussions on additional regulations.
The Chinese state-run Global Times criticized the EU's push for new trade measures on October 16. Chinese experts argued in the newspaper that the EU's strategy of combining dialogue with pressure could undermine mutual trust and escalate confrontation with China.
Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation, stated, "If the EU attempts to undermine the hard-won agreement with China, it would be a serious blow to both sides."
Some EU politicians have faced criticism for interpreting the hybrid car agreement as a sign of success for their pressure strategy against China. Junjun Bo, head of the China-Europe Relations Center at Fudan University, warned, "If the EU continues its pressure on China based on this misunderstanding, it may face retaliatory measures from China."
* This article has been translated by AI.
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