Dependence on China is more dangerous for Europe than any tariff dispute with Trump. Image: keystone
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European industry is being gradually dismantled by cheap competition from China. The EU can no longer afford to look away. But it lacks the strength for a new trade war.
June 20, 2026, 7:57 p.mJune 20, 2026, 7:57 p.m
Remo Hess, Brussels / ch media
At what point does a trade war actually become a trade war? Unlike military conflicts, there is no clear answer. However, when it comes to relations with China, the realization is gaining ground in Europe: This trade war is already underway. And unlike the conflict with the USA, China is not just about tariffs, but about the industrial substance of Europe itself.
Forced out of business
The allegations are well known: China is flooding Europe with a large amount of subsidized products. From steel to solar panels and increasingly cars and machines. Chinese companies are doped with state aid. Since Corona, the flood of Chinese cheap products has increased again. There is talk of a “China shock”. European industry will be pushed to the brink and, in the worst case, bankrupt.
The latest figures show what this means in reality: Europe’s trade deficit with China grew to an astronomical 360 billion euros last year. That is more than twice as much as ten years ago. Every day China delivers goods worth 1 billion euros more to Europe than it imports from here. This year, according to preliminary data, the deficit will be another ten percent more. In addition, China keeps its currency, the renminbi, artificially low. And thus additionally fueled its exports.
The consequence: hundreds of thousands of industrial jobs are lost. In Germany alone there were recently 125,000.
Economy as a geopolitical weapon
This no longer has anything to do with free competition. Rather, the suspicion is growing in Europe that China is using its economy as a geopolitical weapon – to enforce the “Chinese era” and to weaken the West, which President Xi Jinping is striving for. This is evident not only in exports, but also in raw materials, batteries, solar cells and intermediate products, for which Europe has become dangerously dependent.
Politically, this realization has now reached the highest level. At the EU summit in Brussels this week it became clear: things cannot continue like this. We have to stop being “naivety about China’s long-term ambitions,” says a statement from Friedrich Merz, Ursula von der Leyen and ten other Christian Democratic heads of government. But what can the EU do?
Shooting back and escalating the trade war will be difficult. Germany in particular shows how complex the situation is: no EU country is more dependent on China – and none would have more to lose in a trade war. German companies such as VW and BASF are present in China with investments worth billions.
Get out of dependency
Trump’s exchange of blows with Beijing last year showed how quickly a trade war with China can become existential. After Trump’s tariff attack, China quickly stopped exporting critical raw materials such as rare earths. As a result, the lights threatened to go out in Europe’s factories.
Europe is of course aware of its own vulnerability. That’s why they’re now trying to do it in two ways: Despite all the tensions, they will continue to rely on “constructive dialogue,” as Merz said on Friday. The intention is clear: just don’t provoke China. It’s about “saving face,” which is particularly important to the Chinese, says a senior diplomat.
In the background, however, the EU wants to “upgrade”. It has already imposed protective tariffs on Chinese electric cars and cheap steel. There are likely to be more in the future.
According to a French proposal, these could also be global tariffs based on the US model. These could be imposed if an investigation finds unfair or discriminatory trading practices. This would allow us to act more quickly and precisely than today, as we have to rely more heavily on classic WTO and anti-dumping procedures.
But the main dilemma remains unresolved: Europe wants to defend itself against China, but cannot risk Beijing retaliating. It is precisely this dependence that makes the conflict more dangerous than any tariff dispute with Trump. (schweiztoday.ch)