【Epoch Times, December 13, 2025】China’s goods flooding into the European market at ultra-low prices have made conflicts between Europe and Beijing hard to avoid. French President Macron has described the trade imbalance with China as “intolerable,” and he stated that the situation now concerns the “life or death of European industry.” European Commission President von der Leyen believes that the relationship between the EU and China has reached a turning point.
The EU is preparing a series of “ready-to-launch” measures to address the trade imbalance issue, including establishing an economic security center and imposing additional conditions on foreign investments, such as technology transfers and using local content and value chains.
Recent import and export data released by China shows that by 2025, China’s trade surplus with the EU will expand to nearly $300 billion, reaching a historical high, highlighting the extent of the China-EU trade imbalance.
China’s exports to Europe are massive, accounting for nearly a quarter of the EU’s imports, while the EU’s exports to China are only 7%, causing the trade deficit to widen and posing a threat to the survival of European industry. At the same time, China’s global trade surplus has surpassed $1 trillion for the first time, indicating that to circumvent US tariffs, it is redirecting exports to markets in Europe, Africa, and other regions to offset the impact of declining exports to the US.
According to Bloomberg, “the wave of China’s impact on Europe is beginning to show.” Andrew Small, Director of the Asia Program at the European Council on Foreign Relations, stated that “in recent months, the situation has become more urgent. Europe has convened serious crisis response meetings, with some measures being non-public.”
Small, who previously served as an adviser to von der Leyen on China issues, pointed out that this may be the EU’s largest policy readjustment towards China in over a decade.
For years, the EU has been preoccupied with the Ukraine conflict and Trump’s tariff policies, but now it is finally shifting its focus to Beijing and preparing to introduce a series of measures to counter the CCP.
Europe is running out of time. According to Bloomberg, economists at Goldman Sachs estimate that from 2026 to 2029, competition from Chinese exports will decrease the GDP growth rates of Germany, Spain, and Italy by 0.2 percentage points or more.
Currently, European businesses are facing a decline in Chinese exports, while also dealing with fierce competition from cheap Chinese goods exported to Europe. To make matters worse, they also have to contend with Chinese companies “snatching” markets in other overseas regions.
Take Germany as an example. In 2019, the trade deficit with China was $25 billion, but in the first 11 months of this year, due to a significant shrink in imports by Germany, the trade balance with China has turned into a surplus of $23 billion.
As a result, the German economy is in a slump, with companies starting to lay off workers while also dealing with increasingly intense competition from Chinese goods in domestic and overseas markets. Data from the German Federal Statistical Office shows that the industrial sector in Germany has been cutting over 10,000 jobs per month this year. The economic growth rate forecast for Germany next year has been revised down to below 1%.
From the perspective of the entire EU, economists at the European Central Bank warn that the impact of the large amount of Chinese exports may affect nearly a third of the jobs in the EU, equivalent to potentially affecting over 50 million job opportunities.
“The hostility towards export goods from China will escalate, especially in Europe,” said Stephen Jen, a prominent investment manager at hedge fund Eurizon SLJ Capital. “This explosive trade, coupled with the depreciation of the Renminbi, cannot continue indefinitely.”
On December 10th, the European Union Chamber of Commerce in China released a report on supply chain risks, emphasizing that European companies urgently need to diversify their supply chains and reduce their dependence on China.
According to previous reports by Bloomberg, the EU is considering compelling Chinese companies to transfer technology to European companies as a condition for operating locally. This move aims to significantly enhance the competitiveness of EU industries.
Insiders revealed that these measures will target Chinese companies seeking to enter key sectors such as automotive and battery industries in Europe. These regulations will also require these companies to use a certain amount of EU goods or labor and increase the value of products within the EU.
This high-risk measure comes at a critical moment for Europe. Subsidized cheap Chinese products have already flooded the EU industrial sector, while Beijing’s expansion of export restrictions on rare earth metals poses a threat to European manufacturers.
Thomas Regnier, a spokesperson for the European Commission responsible for preparing these regulations, stated, “We are considering taking multiple measures to promote a strong, competitive, and decarbonized European industry.” He added, “Final decisions have not yet been made on the specific scope and nature of these measures.”
French President Macron stated that during his visit to China, he warned Beijing that if action is not taken to reduce China’s massive trade surplus with the EU, the EU will have to resort to tough measures such as imposing tariffs on China.