Europe is confronting a renewed challenge from China that could undermine local manufacturing sectors, leading to significant job losses and increased industrial influence by Beijing. Trade experts and officials warn that the situation mirrors the “China shock” experienced by the United States 25 years ago. At that time, China’s entry into the World Trade Organization led to a surge in imports that displaced domestic industries, resulting in the loss of up to 2.5 million American jobs. Jens Eskelund, president of the European Chamber of Commerce in Beijing, emphasizes that the issue is not merely about finished goods like electric vehicles but rather the vast quantities of components being imported from China, making Europe increasingly reliant on these imports.
As Chinese components become more integral to the European Union’s industrial framework, the EU faces critical decisions. Recent reports suggest that the bloc may require European companies to source critical components from at least three different suppliers. On May 29, European commissioners are scheduled to discuss urgent measures to address the situation. Oliver Richtberg, head of foreign trade at VDMA, commends Brussels for its proactive engagement but criticizes Berlin for its lack of action. Richtberg highlights that state subsidies in China and currency fluctuations, which have potentially left the yuan 40% undervalued against the euro, contribute to the competitive pricing of Chinese products, making them a rational yet troubling choice for procurement managers.
The growing reliance on China is exacerbating the pressure on European industries, with Germany experiencing the loss of 22,000 jobs in the machinery sector in the past year alone. A trade consultant, in collaboration with the Mercator Institute for China Studies, has pointed out alarming data on the import levels of certain products. For instance, the EU imports 52% of its amino acid ingredients by value from China, but this figure jumps to 88% by volume. The situation is even more concerning for polyhydric alcohols, with 96% of EU imports by volume originating from China. The data suggests a risk of EU production becoming uneconomical, ultimately increasing dependency on Chinese supplies.
Trade figures indicate China’s growing surplus with the EU, with some analysts noting that the impact of upcoming EU tariffs on Chinese electric vehicles is being offset by exchange rate dynamics. Andrew Small, director of the Asia program at the European Council on Foreign Relations, asserts that the EU’s current tools are inadequate to address the scale of Chinese imports. China’s trade surplus with Germany, for instance, doubled from $12 billion to $25 billion between 2024 and 2025, as German imports from China reached $118 billion while exports fell to $93 billion. This trend has contributed to an estimated 250,000 industrial job losses in Germany since 2019, particularly in car manufacturing, which saw a reduction of 51,000 jobs between 2024 and 2025.
In response, the EU has proposed legislative measures like the Industrial Accelerator Act and revisions to the Cyber Security Act of 2019 to safeguard its industries. However, these initiatives are not expected to take effect until 2027, placing pressure on Brussels to implement immediate solutions. Small stresses the complexity of achieving consensus among member states on these issues, noting that past efforts to impose tariffs fell short and are unlikely to be revisited. Meanwhile, China’s ability to disrupt EU countermeasures and maintain its export flow places Beijing in a strong position, further complicating the EU’s efforts to balance trade relations.