The European Union is preparing further measures to restrict certain Chinese imports, following an agreement to limit shipments of Chinese hybrid vehicles and growing pressure from European manufacturers facing competition from lower-priced products.
European Commission President Ursula von der Leyen confirmed after the EU summit on 15–16 October that Brussels intended to consider additional trade safeguards extending beyond the automotive sector.
The proposed measures could affect chemicals, plastics, industrial machinery and other manufacturing activities.
Speaking at a joint press conference following the European Council meeting, von der Leyen argued that the EU’s trading relationship with China required substantial rebalancing.
She said the Union’s trade deficit with China had reached approximately €1 billion a day in 2025 and was expected to increase further in 2026.
The Commission has not yet announced a comprehensive package of new restrictions covering all the sectors under discussion.
The initiative remains under development, with potential measures subject to the relevant trade-defence procedures and negotiations.
Chinese imports raise concerns among European manufacturers
China is the European Union’s largest source of imported goods.
According to the European Commission’s trade statistics, EU imports from China reached €559.5 billion in 2025, while European exports to China totalled €199.5 billion.
The resulting goods trade deficit was approximately €359.9 billion.
Machinery and vehicles accounted for more than half of manufactured imports from China, followed by other manufactured products and chemicals.
European manufacturers have raised concerns about China’s extensive industrial production capacity and government support for certain industries.
Where domestic Chinese production exceeds local demand, manufacturers may seek additional export markets.
In sectors characterised by high fixed costs, excess capacity can contribute to intense price competition.
European producers argue that differences in subsidies, financing conditions and industrial policy can place them at a disadvantage.
However, lower-priced imports also benefit European businesses that use Chinese components and materials.
Any restrictions must therefore be assessed against potential increases in costs for manufacturers, distributors and consumers within the EU.
The hybrid vehicle agreement establishes a precedent
The latest proposals follow negotiations between Brussels and Beijing concerning Chinese hybrid vehicle exports.
During trade consultations in October, China agreed to limit shipments of hybrid vehicles to the European market.
In a speech to the European Parliament on 21 October, von der Leyen said the arrangement provided for an annual quota of 350,000 vehicles, representing a reduction of approximately 45 per cent.
She described the agreement as an example of negotiations producing a measurable change in trade flows.
The Commission intends to implement the arrangement through a safeguard mechanism.
However, the agreement addresses only one category of imported vehicles.
Brussels argues that individual sectoral agreements cannot resolve the broader imbalance in trade between the two economies.
Attention is consequently turning towards other manufacturing industries.
Chemicals, plastics and machinery under examination
Following the European Council meeting, French President Emmanuel Macron identified chemicals, plastics and ferro-alloys among the sectors potentially requiring additional protection.
European trade ministers subsequently discussed the impact of rising Chinese exports on industrial production.
Trade Commissioner Maroš Šefčovič indicated that plastics could become an early subject of further safeguard consideration.
Potential investigations include polyethylene terephthalate, commonly known as PET, which is widely used in food packaging, bottles and other manufactured products.
However, any protective measures would depend on the legal and economic conditions applicable to the relevant instruments.
Trade safeguards are distinct from anti-dumping duties.
Anti-dumping measures address imports found to be sold below an appropriate benchmark and causing injury to domestic industry.
Safeguards can address certain circumstances involving increased imports and serious injury or the threat of such injury.
The legal requirements, procedures and possible remedies differ.
Businesses should therefore not assume that discussions of trade restrictions mean additional tariffs have already entered into force.
The EU also wants to reduce supply-chain dependencies
The Commission’s industrial strategy extends beyond restricting imports.
Von der Leyen has announced plans for a new initiative, DiversifyEU, intended to reduce dependence on individual suppliers of critical products.
The Commission expects to present the proposal in December.
It is also developing a mechanism to support countries and industries facing economic coercion or retaliation.
These proposals reflect concerns that dependence on a limited number of foreign suppliers can create commercial vulnerabilities.
Rare earth elements, specialised industrial materials and electronic components are particularly important for advanced manufacturing.
However, diversification can involve additional costs.
European companies may need to identify new suppliers, verify product quality, renegotiate contracts and adjust production processes.
Alternative suppliers may also lack the capacity to replace existing sources immediately.
For companies with complex international supply chains, the effects of any new policy will depend on the products covered and the availability of commercially viable alternatives.
Negotiations with Beijing will continue
Despite its plans for additional trade safeguards, the European Commission has not proposed ending commercial relations with China.
Both economies retain substantial interests in maintaining trade and investment.
At the second EU–China Trade and Investment Consultations, held in Beijing on 8–9 October, the two sides agreed to continue discussions and hold another ministerial meeting in March 2027.
The negotiations addressed trade imbalances, market access and export controls.
China has agreed to make certain adjustments affecting European exports and the licensing of critical materials.
These developments demonstrate that dialogue and trade restrictions are being pursued simultaneously.
What European businesses should expect
The proposed measures could affect European companies in different ways.
Domestic manufacturers competing directly with Chinese imports may benefit from restrictions that reduce price pressure.
Importers, retailers and businesses dependent on Chinese components could face higher purchasing costs or supply difficulties.
Companies operating in both markets may also need to manage changes in regulatory requirements and commercial relationships.
For businesses communicating with suppliers, investors and customers, it will be important to distinguish between proposals, investigations, negotiated agreements and measures already in force.
As QuestComms has previously examined, communication involving European institutions requires an understanding of how decisions progress through different procedures and affect particular audiences.
The next significant developments are expected to include further Commission assessments of vulnerable sectors and the planned December proposal on supply-chain diversification.
For European companies, the immediate priority is to identify exposure to potentially affected products and monitor changes as the Commission develops its proposals.
The outcome will influence not only trade with China, but also Europe’s broader approach to industrial competitiveness, supply-chain resilience and international economic relations.
