Why Europe Fears a Flood of Cheap Goods From China

 

Why Europe Fears a Flood of Cheap Goods From China

 

President Trump’s tariffs on China could lead to a hazardous scenario for European countries: the dumping of artificially cheap products that could undermine local industries.

 

Michael D. Shear Jeanna Smialek

By Michael D. Shear and Jeanna Smialek

Michael D. Shear reported from London, and Jeanna Smialek from Brussels.

https://www.nytimes.com/2025/04/14/world/europe/europe-china-dumping-tariffs.html

April 14, 2025

Updated 12:12 p.m. ET

 

China has for years presented an economic challenge for Europe. Now, it could become an economic disaster.

 

It produces a vast array of artificially cheap goods — heavily subsidized electric vehicles, consumer electronics, toys, commercial grade steel and more — but much of that trade was destined for the endlessly voracious American marketplace.

 

With many of those goods now facing an extraordinary wall of tariffs thanks to President Trump, fear is rising that more products will be dumped in Europe, weakening local industries in France, Germany, Italy and the rest of the European Union.

 

Those nations now find themselves trapped in the middle of Mr. Trump’s spiraling trade war with China. Their leaders are straddling a fine line between capitulation and confrontation, hoping to avoid becoming collateral damage.

 

“The overcapacity challenge has taken a long time, but it has finally arrived in European capitals,” said Liana Fix, a Washington-based fellow at the Council on Foreign Relations. “There is a general trend and a feeling in Europe that in these times, Europe has to stand up for itself and has to protect itself.”

 

Ursula von der Leyen, the president of the European Commission, has promised to “engage constructively” with China even as she has warned about the “indirect effects” of the American tariffs and has vowed to closely watch the flow of Chinese goods. A new task force will monitor imports for signs of dumping.

 

“We cannot absorb global overcapacity nor will we accept dumping on our market,” Ms. von der Leyen said as Mr. Trump’s tariffs went into effect.

 

Her tough but measured message to both China and the United States has impressed trade experts who say it may be the best chance for Europe to avoid economic disaster. Janka Oertel, the director of the Asia program at the European Council on Foreign Relations, called it a “sober” response to the threat from Beijing.

 

“They continue to stand their ground on China, because otherwise they lose it,” she said.

 

But the high stakes moment is testing the continent’s unity.

 

Pedro Sánchez, the Spanish prime minister, last week traveled to Beijing to meet with President Xi Jinping, urging greater engagement with China as a hedge against U.S. tariffs. His outreach, captured visually in a handshake with the Chinese leader, came even as Ms. von der Leyen and the leadership of the European Commission, the bloc’s executive branch, continue to demand assurances from Beijing that the dumping would not accelerate.

 

Germany last year opposed higher electric vehicle tariffs imposed by the European Union, afraid that China would raise taxes on its own car industry. In Britain, no longer a member of the bloc, Prime Minister Keir Starmer has called for “consistent, durable, respectful” relations with China as he struggles to jump-start his country’s sluggish economy.

 

“The worst-case scenario is high U.S. tariffs” while at the same time “China is flooding the European market,” said Noah Barkin, a senior adviser for the Rhodium Group, a policy research organization. He said that would be “a double whammy for European industry. That is what Europe wants to avoid.”

 

Leaders who argue that closer ties with China may be part of the answer, like Mr. Sánchez in Spain and Mr. Starmer in Britain, have found it to be a politically winning message at a time when their countries are eager for more foreign investment.

 

Announcements of a new Chinese factory that will eventually create thousands of jobs are popular at home. But at times, that eagerness can threaten to undercut a consistent, European message on trade.

 

“Spain sees things very differently from Poland,” said Theresa Fallon, director at the Center for Russia, Europe, Asia Studies in Brussels. “There’s an ongoing debate in Europe about what their stance toward China should be.”

 

But trade experts say the economic relationship between Europe and China is rooted in a decades-old reality: a Chinese marketplace that is effectively closed to many European companies because of regulatory burdens and the Communist Party’s buttressing of Chinese companies. The European trade deficit with China was nearly $332 billion (€292 billion) in 2023.

 

The E.U. leadership describes China as a “a systemic rival,” and relations with the Asian nation have soured in recent years for a host of reasons, including China’s support of Russia as it wages war on Ukraine.

 

Recent conversations between top European commissioners and their Chinese counterparts have contained blunt warnings from the European side.

 

“Current E.U.-China trade relations remain unbalanced,” the European Commission said in a statement after Maros Sefcovic, the bloc’s trade commissioner, visited Beijing to discuss market access. The statement hinted at tensions during the visit, saying that China and Europe have a widening trade deficit “fueled by illegal subsidies.”

 

European officials have for years demanded concessions from China that include voluntary restraints on the shipment of cheap goods and minimum prices to offset large government subsidies that European businesses charge are unfair.

 

Meanwhile, Chinese officials have seemed eager in recent days to paint Europe as an increasingly close trading partner. China’s readout after Mr. Sefcovic’s visit to Beijing had little mention of hard talk. It said that Mr. Sefcovic had described China as “an important partner” and that the two economies would “jointly resist unilateralism and protectionism.”

 

And after Mr. Trump’s April 2 tariff announcement, China’s Commerce Ministry said it had agreed to restart negotiations with the bloc over Europe’s higher tariffs on Chinese-made electric vehicles.

 

When asked about that announcement, European officials struck a more muted tone. Olof Gill, an E.U. spokesman for trade, said officials had agreed to “continue discussions” on electric vehicle supply chains and take a “fresh look” at pricing.

 

China’s push has at times been more overt. The Mission of China to the European Union has run a series of sponsored articles on the website Euractiv, a prominent source in Brussels policy circles. The articles focus on how China and Europe might draw closer together. “With a hurricane blowing through Washington, China is looking more like a strategic partner for Europe,” one declared.

 

For now, the European Union has made little show of embracing that — instead pushing China to reach a deal with the United States, hoping to avoid the fallout if it fails to do so.

 

An E.U.-China summit is set to take place this year, potentially in the second half of July.

 

“I think basically Europe is just hoping to make it into summer with everything intact, more or less, and to not have the economy crashed,” Ms. Fix said. “To sort of land the plane until the summer, and then to prepare for what comes next.”

 

Jeanna Smialek is the Brussels bureau chief for The Times.