China warns it will act if the EU’s new “Made in Europe” rules on strategic sectors become law, sparking fresh trade tension between Beijing and Brussels.
Beijing on Monday warned that it would take “countermeasures” if the European Union pushes ahead with its newly‑drafted “Made in Europe” plan, a move meant to protect key industries from foreign competition.
EU's 'Made in Europe' Initiative
Behind the rhetoric, the drive reflects a broader strategic shift.. European leaders argue that decades of subsidised Chinese production have eroded market share, especially in batteries and electric vehicles.. By insisting on local content and technology transfer, the EU hopes to create a self‑sustaining supply chain that can rival China’s scale.. If adopted, the rules could reshape investment patterns, forcing multinational firms to restructure operations or risk losing lucrative public contracts.
The concept of a “Made in Europe” agenda is not new.. Over the past decade the bloc has rolled out a series of initiatives—ranging from the European Fund for Strategic Investments to the Green Deal—to boost domestic manufacturing and reduce reliance on imports.. Yet the current proposal marks the first time the EU has linked public procurement directly to a geographical origin requirement, a step that many analysts view as edging toward protectionism.
For workers on the factory floor, the stakes feel very real.. At a car assembly plant in northern Italy, a line supervisor told Misryoum that employees have watched foreign competitors undercut prices for years.. “If we can keep more parts made here, maybe the jobs won’t disappear,” she said, highlighting the human side of a policy that often sounds abstract.
China's Potential Countermeasures
The situation echoes the United States’ recent Inflation Reduction Act, which offers tax credits only to vehicles with a certain percentage of North‑American parts.. That policy triggered a wave of re‑tooling by automakers and sparked diplomatic pushback from allies.. Similarly, the EU’s plan could trigger a cascade of policy responses, creating a fragmented global market where each bloc imposes its own set of rules.
Looking ahead, the dispute may force both sides back to the negotiating table.. If China imposes counter‑measures, European businesses that rely on Chinese components could feel the pressure to lobby for a compromise.. Meanwhile, the EU might adjust thresholds or offer exemptions to avoid a full‑blown trade war, especially as both economies navigate post‑pandemic recovery.
European officials have reiterated that the proposal is about “fair competition” rather than exclusion. A spokesperson for Misryoum said the EU remains open to dialogue and hopes China will engage constructively rather than resorting to retaliation.
The standoff underscores how supply‑chain security has become a flashpoint in global trade, with policy tools increasingly used to shape market dynamics.. As the EU finalises the draft, the world will be watching whether Beijing’s warning turns into concrete action, and how that will reverberate through industries from steel mills to EV factories.